American Express Earnings Preview

Investors are on the edge of their collective seats, hoping that American Express (NYSE: AXP  ) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Wednesday. American Express is a global payments, network, and travel company that offers credit card products and travel-related services to consumers and businesses on an international scale.

What analysts say:
 

  • Buy, sell, or hold?: The majority of analysts back American Express as a buy. But with 72.2% of analysts rating it a buy, American Express is still below the mean analyst rating of its nearest 10 competitors, which average 76.8% buys. Analysts like American Express better than competitor Bank of America overall. Nine out of 23 analysts rate Bank of America a buy compared to 13 of 18 for American Express. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $7.58 billion in revenue this quarter. That would represent a rise of 7.8% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.96 per share. Estimates range from $0.85 to $1.05.

What our community says:
CAPS All-Stars are solidly behind the stock with 93.1% granting it an outperform rating. The community at large backs the All-Stars with 89.7% giving it a rating of outperform. Fools have embraced American Express and haven't been shy with their opinions lately, logging 863 posts in the past 30 days. Despite the majority sentiment in favor of American Express, the stock has a middling CAPS rating of three out of five stars.

Management:
American Express' profit has risen year over year by an average of 45.7% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Net Margin

16.2%

15.4%

13.4%

14.3%

For all our American Express Company-specific analysis, including earnings and beyond, add American Express to My Watchlist.

Motley Fool newsletter services have recommended creating a write covered strangle position in American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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