Payments company American Express (AXP) is scheduled to announce its fourth-quarter results on January 24. AXP shares have rallied about 74% over the past year, driven by the company’s expense management that helped it offset the impact of a challenging macro backdrop on consumer spending. Analysts expect the company’s adjusted EPS (earnings per share) to rise about 16% year-over-year to $3.03, while revenue is forecasted to grow 8.6% to $17.16 billion.
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American Express exceeded analysts’ expectations in each of the first three quarters of 2024. In particular, the credit card company’s third-quarter results were driven by higher loan volumes, stable growth in card-member spending, and accelerated growth in revenue from card fees.
Analysts’ Views Ahead of AXP’s Q4 Results
Ahead of the results, RBC Capital analyst Jon Arfstrom increased the price target for American Express stock to $330 from $315 and maintained a Buy rating as part of the Q4 earnings preview for the consumer finance group. The analyst expects “steady fundamental results,” with loan growth and spending volumes to be driven by seasonal tailwinds.
Arfstrom added that after normalizing over the last two years, core trends for the consumer finance sector have stabilized, and delinquency metrics now seem to align with typical seasonality trends. The analyst highlighted that AXP is RBC’s preferred card name due to the durability of its revenue base, EPS growth outlook, and strong credit quality expectations.
Earlier this month, Truist Securities analyst Brian Foran initiated coverage of American Express stock with a Buy rating and a price target of $350. The analyst believes that AXP’s competitive moat and long-term tailwinds, including a loyal high-end customer base and international presence, outweigh some of the concerns around sustainable growth.
Here’s What Options Traders Expect
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 4.1% move in either direction in reaction to AXP’s Q4 results.
Is AXP a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on AXP stock based on six Buys, 11 Holds, and one Sell recommendation. Following a stellar rally, the average AXP stock price target of $314.56 implies a modest downside risk of 1.1%.
