American Express (AXP) AI Stock Analysis

• Market Cap: $211.43B
• Dividend Yield: 0.93%
• Average Volume (3M): 2.51M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 1.15
• Revenue Growth: 10.12%
• EPS Growth: 24.93%
• Country: US
• Employees: 75,100
• Sector: Financial
• Sector Strength: 93
• Industry: Credit Finance
• EPS (TTM): 14.01
• Shares Outstanding: 702,532,100
• 10 Day Avg. Volume: 2,481,189
• 30 Day Avg. Volume: 2,514,794
• PEG Ratio: 0.86
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.48
• Price to Cash Flow (P/CF): 9.20
• P/FCF Ratio: 7.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $326.60
• Price Target Upside: 15.22% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22

American Express's overall stock score of 71 reflects its solid financial performance, supported by strong margins and low debt, despite recent revenue decline. The positive earnings call and strategic corporate events bolster the score, while technical indicators suggest a cautious near-term outlook.

Positive Factors

Confidence in Full-Year Guidance

American Express has indicated confidence in full-year guidance despite potential short-term challenges.

Premium Card Industry Growth

The premium card industry is growing much faster than the overall card industry, which benefits American Express.

Negative Factors

1Q25 Revenue Guidance

American Express is now guiding to 1Q25 revenues that are worse than consensus estimates.

American Express Business Overview & Revenue Model

Company Description

American Express (AXP) is a globally recognized financial services corporation, primarily known for its credit card, charge card, and traveler's cheque businesses. Operating in sectors such as financial services, travel, and network services, American Express offers a wide range of products including consumer, small business, and corporate credit cards, as well as travel-related services and products. The company is renowned for providing premium customer service and loyalty programs, like the Membership Rewards program, which enhance card member satisfaction and retention.

How the Company Makes Money

American Express makes money through various revenue streams, primarily driven by card fees, transaction fees, and interest income. A significant portion of revenue comes from discount revenue, which is the fee charged to merchants for processing transactions made using American Express cards. Additionally, the company earns money from annual membership fees for its card products, which range from basic to premium offerings. Interest income is generated from outstanding balances on credit card accounts. The company also benefits from partnerships with airlines, hotels, and other businesses, which enhance its card offerings and incentivize spending through co-branded cards. Furthermore, American Express provides travel and expense management services for corporate clients, generating additional revenue from service fees and travel commissions. These diversified streams contribute to a robust and stable earnings model for the company.

American Express Financial Statement Overview

Summary

American Express shows a solid financial position with strong profitability and efficient operations. Despite a revenue decline in the latest fiscal year, the company maintained robust margins and effective cash flow management. Low debt levels provide financial flexibility, though the equity ratio suggests caution for future expansions.

Income Statement

American Express demonstrated a strong income statement with a solid gross profit margin and consistent revenue growth. The gross profit margin for 2024 was approximately 83.8%, indicating efficient cost management. The net profit margin improved to 20.1%, reflecting effective profitability strategies. Revenue growth from the previous year was negative at -16.5%, primarily due to economic conditions impacting consumer spending. EBIT and EBITDA margins showed robustness at 71.7%, showcasing operational efficiency.

Balance Sheet

The balance sheet of American Express indicates financial stability with a low debt-to-equity ratio of approximately 0.045, showcasing prudent debt management. The company's equity ratio stood at 11.1%, reflecting a moderate reliance on equity financing. Return on equity was strong at 33.5%, demonstrating effective utilization of shareholder capital. However, the equity ratio suggests potential risks if asset values fluctuate.

Cash Flow

Cash flow analysis reveals a mixed performance. The operating cash flow to net income ratio was 1.39, indicating strong cash generation from operations relative to net income. Free cash flow decreased from the previous year, resulting in a negative growth rate of -17.31%. The free cash flow to net income ratio was 1.39, reflecting healthy cash flow conversion despite the decline in free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
50.41B	60.36B	52.86B	42.38B	36.09B
	Gross Profit
42.21B	34.51B	32.75B	27.23B	24.33B
	EBIT
36.17B	10.76B	12.35B	10.69B	4.30B
	EBITDA
36.17B	14.33B	12.59B	13.20B	0.00
	Net Income Common Stockholders
10.13B	8.37B	7.51B	8.06B	3.13B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
77.87B	86.07B	38.07B	24.03B	54.38B
	Total Assets
271.46B	261.11B	228.00B	189.00B	191.00B
	Total Debt
1.37B	49.16B	44.00B	41.00B	45.00B
	Net Debt
-76.27B	2.63B	10.46B	19.48B	12.17B
	Total Liabilities
241.20B	233.05B	203.00B	167.00B	168.00B
	Stockholders Equity
30.26B	28.06B	25.00B	22.00B	23.00B
Cash Flow		Free Cash Flow
14.05B	17.00B	19.22B	13.10B	4.11B
	Operating Cash Flow
14.05B	18.56B	21.08B	14.64B	5.59B
	Investing Cash Flow
-24.40B	-24.43B	-33.69B	-10.53B	11.63B
	Financing Cash Flow
4.44B	18.38B	24.51B	-14.93B	-9.07B

American Express Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 283.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AXP, the sentiment is Negative. The current price of 283.47 is below the 20-day moving average (MA) of 304.96, below the 50-day MA of 305.95, and above the 200-day MA of 270.06, indicating a neutral trend. The MACD of -5.01 indicates Positive momentum. The RSI at 31.36 is Neutral, neither overbought nor oversold. The STOCH value of 30.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AXP.

American Express Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
V	84 Outperform	$688.11B	35.98	52.15%	0.61%	10.35%	16.40%
MA	80 Outperform	$525.43B	41.50	198.52%	0.47%	12.07%	17.27%
SYF	75 Outperform	$23.59B	7.09	21.10%	1.65%	19.73%	65.57%
DFS	74 Outperform	$49.11B	11.02	25.30%	1.43%	15.25%	45.76%
COF	72 Outperform	$76.48B	17.31	7.81%	1.22%	9.06%	-3.02%
AXP	71 Outperform	$211.43B	21.47	33.47%	0.93%	10.12%	24.93%
Sector *	64 Neutral	$14.34B	10.61	9.28%	4.07%	18.04%	-9.54%

American Express Corporate Events

American Express Elects Michael J. Angelakis to Board

On March 3, 2025, American Express announced the election of Michael J. Angelakis to its Board of Directors. Mr. Angelakis, with a robust background in corporate finance and strategic investments, is expected to contribute significantly to the company’s growth strategy. Additionally, American Express declared an increase in its quarterly dividend from $0.70 to $0.82 per common share, reflecting its strong financial performance and commitment to shareholder value.

American Express Reports on Credit Performance Trends

American Express disclosed its delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending January 31, 2025, and December 31 and November 30, 2024. The company reclassified $758 million of small business loans related to its Lowe’s cobrand portfolio to loans held for sale, impacting the reported figures. The statistics indicate steady delinquency rates but a slight increase in the net write-off rates over the three months. These figures, excluding securitized loans, provide insights into the company’s credit performance and could influence stakeholders’ perspectives on its lending practices.

American Express Announces Executive Leadership Changes

On January 30, 2025, American Express announced that Anré Williams, Group President of Enterprise Services, will be leaving the company after 35 years, transitioning to a Senior Executive Advisor role until November 2025. His departure will bring a series of executive team changes aimed at strengthening American Express’s leadership and growth strategy, including expanded roles for key executives to enhance digital transformation and global servicing capabilities, which are expected to bolster the company’s competitive positioning and operational efficiencies.

American Express Reports Record 2024 Financial Results

On January 24, 2025, American Express announced record financial results for the fiscal year 2024, with revenues reaching $65.9 billion, a 10% increase on an FX-adjusted basis, and earnings per share rising 25% to $14.01. The company also reported significant growth in Card Member spending and new card acquisitions. Looking ahead, American Express expects revenue growth of 8% to 10% for 2025 and plans to increase its quarterly dividend by 17%, emphasizing its strong market position and commitment to shareholder returns.

American Express Announces Loan Reclassification Impact

In a recent announcement, 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 December 31, November 30, and October 31, 2024. The release highlighted a reclassification of $758 million in loans from the Lowe’s small business co-brand portfolio to loans held for sale, impacting the reported figures for December 2024. The statistics, separate from those of the Lending Trust, reflect differences in credit performance due to loan mix and other factors, illustrating variability in monthly reporting periods.

American Express Reports Stable Credit Performance Trends

American Express has released delinquency and write-off statistics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ending September through November 2024. The data shows stability in the percentage of loans 30 days past due for both consumer and small business segments, while net write-off rates showed slight fluctuations across these months. These figures suggest a steady credit performance, though variability may occur due to factors like loan aging and external timing influences, impacting the financial health of the company’s lending operations.