Shares of American Express (AXP) gained in pre-market trading as the company reported upbeat Q4 results. The financial services company’s adjusted earnings increased by 16% year-over-year to $3.04 per share, slightly ahead of consensus estimates of $3.03 per share.
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AmEx’s Revenues Driven by Higher Spending Volumes
Furthermore, the company’s revenues increased by 9% year-over-year to $17.2 billion in the fourth quarter. This was in line with analysts’ estimates. A robust holiday season and falling interest rates helped AmEx maintain strong spending volumes.
AmEx caters primarily to affluent customers, and has navigated economic uncertainty better than its peers, as wealthier consumers are less affected by inflation and high borrowing costs. In the fourth quarter, the company’s billed business, that is, spending on AmEx cards, rose 8% year-over-year to $408.4 billion. Additionally, provisions for credit losses dropped to $1.3 billion from $1.4 billion a year earlier.
Furthermore, AXP raised its dividend by 17% to $0.82 per share beginning with the first quarter.
AXP Issues FY25 Outlook
Looking ahead, the company expects FY25 earnings in the range of $15 to $15.50 per share. For reference, analysts were expecting the company to report earnings of $15.23 per share.
What Is the Future of AXP Stock?
Analysts remain cautiously optimistic about AXP stock, with a Moderate Buy consensus rating based on six Buys, nine Holds, and one Sell. Over the past year, AXP has surged by more than 70%, and the average AXP price target of $316.20 implies a downside potential of 2.97% from current levels. These analyst ratings are likely to change following AXP’s results today.
