William Blair analyst Christopher Kennedy has reiterated their bullish stance on AXP stock, giving a Buy rating yesterday.
Christopher Kennedy’s rating is based on American Express’s strong positioning in the premium consumer segment, which is supported by its tight underwriting standards and fee-based revenue model. These factors are expected to help the company navigate potential macroeconomic challenges effectively. Additionally, American Express has demonstrated the ability to sustain strong double-digit EPS growth across various revenue environments, with an impressive average ROE of over 26% over the past two decades.
Despite a 15% year-to-date decline in AXP shares, which is partly due to macroeconomic uncertainties, the stock trades at a significant discount compared to the S&P 500. Kennedy believes this discount is unjustified given American Express’s faster revenue and earnings growth relative to the market. The company’s recent financial performance, including a 7% revenue increase and adjusted EPS that exceeded both Kennedy’s and the Street’s estimates, further supports the Buy rating. Management’s affirmation of 2025 revenue and EPS growth guidance also contributes to the positive outlook.
Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AXP in relation to earlier this year.