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American Express (AXP)
NYSE:AXP

American Express (AXP) AI Stock Analysis

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American Express

(NYSE:AXP)

Rating:76Outperform
Price Target:
American Express has a strong financial foundation with robust revenue and profit growth backed by efficient cash flow management. The technical analysis indicates short-term caution, and the valuation suggests a fair price compared to peers. Positive earnings call and corporate events further support the company's future growth prospects despite macroeconomic uncertainties.
Positive Factors
Credit Quality
American Express's credit quality remains best-in-class, exemplifying the resilience of the higher-income cardmember base.
Customer Acquisition
Customer acquisition was strong, with NNA growth of ~5%, up from 3-4% in 2H24.
Financial Performance
Adjusted EPS exceeded estimates, driven by a reserve release, indicating strong financial performance.
Negative Factors
Competition and Regulation
Increased competition or regulatory actions concerning credit cards, particularly related to interchange rates, could pose downside risks.
Macroeconomic Concerns
Macroeconomic uncertainties could lead to a slowdown in revenue growth, with AXP's volumes likely to be more affected than those of other major card players, given its high exposure to travel and entertainment.
Spending Concerns
Concern over spend amid uncertain macro weighs on stock.

American Express (AXP) vs. SPDR S&P 500 ETF (SPY)

American Express Business Overview & Revenue Model

Company DescriptionAmerican Express Company (AXP) is a leading global financial services corporation, primarily known for its credit card, charge card, and travel-related services. Headquartered in New York City, the company operates in the financial services sector, offering a wide range of products including consumer, small business, and corporate credit cards, as well as merchant acquisition and processing services. American Express is renowned for its premium customer service and rewards programs, catering to a diverse clientele ranging from individual consumers to large corporations.
How the Company Makes MoneyAmerican Express generates revenue through several key streams: card fees, interest on outstanding balances, merchant discount revenues, and travel-related services. A significant portion of its income comes from the annual fees charged for its premium credit and charge cards. The company also earns interest income from cardholders who carry a balance on their credit cards. Merchant discount revenue is another substantial source of income, where American Express charges merchants a fee for processing transactions made with its cards. Additionally, the company offers a range of travel-related services, earning fees from travel bookings and related activities. Strategic partnerships with businesses and merchants further enhance fee-based income, supporting the company's robust financial performance.

American Express Key Performance Indicators (KPIs)

Any
Any
Total Network Volume
Total Network Volume
Measures the total dollar amount of transactions processed, reflecting the scale of the network and overall economic activity facilitated by American Express.
Chart InsightsAmerican Express's Total Network Volume has shown a robust recovery since the pandemic-induced dip in 2020, with consistent growth through 2024. The latest earnings call highlights strong card member spending and international growth, which supports this upward trend. However, a slowdown in airline billings and macroeconomic uncertainties pose potential risks. Despite these challenges, the company's strategic focus on attracting Millennials and Gen-Z consumers, alongside resilient credit performance, underpins its optimistic revenue growth guidance of 8% to 10% for the fiscal year.
Data provided by:Main Street Data

American Express Earnings Call Summary

Earnings Call Date:Apr 17, 2025
(Q1-2025)
|
% Change Since: 17.01%|
Next Earnings Date:Jul 18, 2025
Earnings Call Sentiment Positive
The earnings call for American Express Q1 2025 was generally positive, highlighting strong revenue and income growth, robust card member spending, and resilient credit performance. However, challenges such as a slowdown in airline billings growth and macroeconomic uncertainty were noted.
Q1-2025 Updates
Positive Updates
Strong Revenue and Income Growth
American Express reported revenues of $17 billion, up 8% year-over-year on an FX adjusted basis, or 9% excluding the leap year impact, and generated net income of $2.6 billion or $3.64 per share.
Robust Card Member Spending and New Accounts
Total card member spending grew 6% in the quarter, or 7% excluding the impact of leap year. The company added 3.4 million new cards in the quarter, with Millennials and Gen-Z consumers making up over 60% of new consumer accounts acquired.
High Card Fee Growth
Card fee growth was up 20% on an FX adjusted basis, marking the 27th consecutive quarter of double-digit card fee growth.
Strong International Growth
International Card Services' spend was up 14%, with each of the top five markets growing by double-digits.
Resilient Credit Performance
Credit performance remained strong with delinquency and write-off rates below pre-pandemic levels and flat to the prior year.
Negative Updates
Sequential Slowdown in Airline Billings Growth
There was a deceleration in airline spending relative to 2024 trends, although spending on front of cabin tickets remained strong, up around 11% in the quarter.
Macroeconomic Uncertainty
The level of macroeconomic uncertainty has increased, with a peak weighted average unemployment rate of around 5.7% being incorporated into their guidance.
Impact of Foreign Exchange on Revenue
The strengthening of the U.S. dollar continues to be a headwind to reported revenue growth, although a bit less than anticipated earlier in the quarter.
Company Guidance
During the American Express Q1 2025 earnings call, guidance for the fiscal year was reaffirmed, projecting full-year revenue growth of 8% to 10% and earnings per share (EPS) between $15 and $15.50. This guidance is based on a macroeconomic outlook that includes a projected peak unemployment rate of around 5.7%. The company reported Q1 revenues of $17 billion, an 8% increase year-over-year on an FX-adjusted basis, and a net income of $2.6 billion, translating to $3.64 per share. Total card member spending increased by 6% in the quarter, with a 7% increase excluding the leap year impact, driven by growth in both goods and services and strong performance in T&E, particularly in restaurants and lodging. American Express added 3.4 million new cards in Q1, with Millennials and Gen-Z consumers constituting over 60% of new consumer accounts. Additionally, card fee growth was up 20% on an FX-adjusted basis, and credit performance remained strong. Despite some macroeconomic uncertainties, the company emphasized its resilient business model and strategic investments for long-term growth.

American Express Financial Statement Overview

Summary
American Express shows strong financial metrics with robust revenue growth of 34.7% and a high net profit margin of 15.1%. The balance sheet is healthy with a low debt-to-equity ratio, and cash flows are efficiently managed. However, there is room to enhance operational efficiency observed in the EBIT margin.
Income Statement
85
Very Positive
American Express has demonstrated strong income statement metrics with a TTM Gross Profit Margin of 78.7% and a Net Profit Margin of 15.1%. The Revenue Growth Rate from the previous year was 34.7%, indicating robust revenue expansion. However, the EBIT margin of 14.0% suggests room for improvement in operational efficiency.
Balance Sheet
75
Positive
The company maintains a healthy balance sheet with a low Debt-to-Equity Ratio of 0.05, reflecting prudent leverage management. However, the Equity Ratio of 11.1% indicates a moderate level of equity financing. Return on Equity (ROE) is strong at 32.9%, showcasing effective use of shareholder funds.
Cash Flow
82
Very Positive
Cash flow metrics are positive, with a stable Free Cash Flow to Net Income Ratio of 1.14 and a solid Operating Cash Flow to Net Income Ratio of 1.29, indicating efficient cash conversion. Despite a slight decline in Free Cash Flow Growth Rate of -3.2% compared to the previous year, cash flows remain strong.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
75.33B74.20B60.36B52.86B42.38B36.09B
Gross Profit
62.05B60.76B34.51B32.75B27.23B24.33B
EBIT
13.08B12.89B10.76B12.35B10.69B4.30B
EBITDA
14.80B14.57B14.33B12.59B13.20B0.00
Net Income Common Stockholders
10.28B10.13B8.37B7.51B8.06B3.13B
Balance SheetCash, Cash Equivalents and Short-Term Investments
55.97B41.51B86.07B38.07B24.03B54.38B
Total Assets
269.26B271.46B261.11B228.00B189.00B191.00B
Total Debt
50.57B51.09B49.16B44.00B41.00B45.00B
Net Debt
-3.58B10.54B2.63B10.46B19.48B12.17B
Total Liabilities
240.50B241.20B233.05B203.00B167.00B168.00B
Stockholders Equity
28.76B30.26B28.06B25.00B22.00B23.00B
Cash FlowFree Cash Flow
11.32B12.14B17.00B19.22B13.10B4.11B
Operating Cash Flow
13.26B14.05B18.56B21.08B14.64B5.59B
Investing Cash Flow
-20.81B-24.40B-24.43B-33.69B-10.53B11.63B
Financing Cash Flow
5.90B4.44B18.38B24.51B-14.93B-9.07B

American Express Technical Analysis

Technical Analysis Sentiment
Positive
Last Price295.93
Price Trends
50DMA
273.48
Positive
100DMA
284.89
Positive
200DMA
281.00
Positive
Market Momentum
MACD
5.81
Positive
RSI
60.05
Neutral
STOCH
87.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXP, the sentiment is Positive. The current price of 295.93 is above the 20-day moving average (MA) of 293.20, above the 50-day MA of 273.48, and above the 200-day MA of 281.00, indicating a bullish trend. The MACD of 5.81 indicates Positive momentum. The RSI at 60.05 is Neutral, neither overbought nor oversold. The STOCH value of 87.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AXP.

American Express Risk Analysis

American Express disclosed 33 risk factors in its most recent earnings report. American Express reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

American Express Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
VV
82
Outperform
$709.46B37.2150.03%0.63%10.19%12.45%
MAMA
77
Outperform
$528.46B40.82188.92%0.49%12.94%13.22%
77
Outperform
$69.37B16.3322.20%4.50%12.82%
AXAXP
76
Outperform
$208.35B20.7734.02%0.98%8.45%17.89%
COCOF
73
Outperform
$125.23B16.437.90%1.23%6.69%-6.76%
64
Neutral
$12.80B9.717.59%16985.66%12.07%-7.53%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AXP
American Express
295.93
65.19
28.25%
COF
Capital One Financial
192.86
58.37
43.40%
MA
Mastercard
585.44
139.38
31.25%
V
Visa
366.77
91.73
33.35%
PYPL
PayPal Holdings
72.47
5.45
8.13%

American Express Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
American Express Issues €1 Billion in Notes
Neutral
May 20, 2025

On May 20, 2025, American Express issued €1,000,000,000 in Fixed-to-Floating Rate Notes due in 2032, under a senior indenture with The Bank of New York Mellon as trustee. This issuance is part of the company’s strategic financial operations, potentially impacting its financial structure and market positioning.

The most recent analyst rating on (AXP) stock is a Hold with a $290.00 price target. To see the full list of analyst forecasts on American Express stock, see the AXP Stock Forecast page.

Financial Disclosures
American Express Reports Stable Loan Delinquency Rates
Neutral
May 15, 2025

In a recent update, American Express reported delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for February, March, and April 2025. The statistics showed stable delinquency rates at 1.4% for consumer loans and 1.6% for small business loans over the three months, while net write-off rates slightly decreased for both segments. This data, which excludes loans held for sale, provides insights into the company’s credit performance and reflects the impact of various factors such as loan mix and seasonal variability.

The most recent analyst rating on (AXP) stock is a Hold with a $290.00 price target. To see the full list of analyst forecasts on American Express stock, see the AXP Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
American Express Reports Strong Q1 2025 Financial Results
Positive
Apr 17, 2025

On April 17, 2025, American Express reported strong financial results for the first quarter of 2025, with a revenue increase of 7% to $17.0 billion, or 8% on an FX-adjusted basis, and earnings per share rising by 9% to $3.64. The company maintained its full-year guidance for revenue growth and EPS, driven by higher net interest income, increased Card Member spending, and strong card fee growth. Despite a slight decrease in provisions for credit losses, consolidated expenses rose by 10% due to higher customer engagement costs and increased operating expenses. American Express continues to focus on long-term growth, emphasizing customer support, disciplined expense management, and strategic investments.

Financial Disclosures
American Express Reports Stable Delinquency Rates Q1 2025
Neutral
Apr 15, 2025

In a recent release, American Express reported its delinquency and write-off statistics for U.S. Consumer and U.S. Small Business Card Member lending portfolios for the first quarter of 2025. The data indicates stable delinquency rates and slight variations in write-off rates, reflecting the company’s ongoing efforts to manage credit risk effectively. The reclassification of Lowe’s small business cobrand portfolio loans as held for sale, effective December 2024, is a notable change in their balance sheet reporting, potentially impacting future financial statements.

Financial Disclosures
American Express Reports Delinquency and Write-Off Statistics
Neutral
Mar 17, 2025

American Express reported delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending February 28, January 31, 2025, and December 31, 2024. The company reclassified $758 million of loans related to its Lowe’s small business cobrand portfolio as loans held for sale, which are not included in the reported statistics. The data shows a consistent delinquency rate of 1.4% for consumer loans and a slight increase in the net write-off rate over the three months. For small business loans, the delinquency rate remained stable at 1.6%, with a gradual increase in the net write-off rate. These statistics provide additional insights beyond the data reported by the American Express Credit Account Master Trust, highlighting differences in credit performance due to factors like loan mix and calculation methods.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.