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Quarterly results from several of the major credit card companies will be a highlight of this week’s earnings lineup with a spotlight on American Express AXP in particular.
Hitting fresh 52-week highs of $319 a share on Tuesday, AXP has soared over +70% in the last year. This has impressively outperformed the broader indexes and many of its credit card peers including Capital One’s COF +49% and Mastercard’s MA +20%.
That said, let’s see if the surge in American Express stock can continue as its Q4 earnings approach on Friday, January 24.
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American Express Q4 Expectations
American Express’s Q4 sales are expected to come in at $17.18 billion, a 9% increase from $15.8 billion in the comparative quarter. On the bottom line, Q4 EPS is thought to have spiked 15% to $3.03 versus $2.62 per share a year ago.
Rounding out fiscal 2024, the credit giant’s total sales are slated to increase 9% to $65.95 billion with annual earnings expected to climb 19% to $13.40 per share. Notably, American Express has surpassed the Zacks EPS Consensus in three of its last four quarterly reports with an average EPS surprise of 6.53%.
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FY25 Outlook
Looking ahead, American Express’s top line is projected to expand another 8% in FY25 to $71.48 billion. More impressive, annual earnings are expected to spike another 14% this year to $15.24 per share.
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AXP Valuation Comparison
What may intrigue investors is that AXP still trades at 20.5X forward earnings which is a slight discount to the benchmark S&P 500. AXP also trades nicely beneath Mastercard’s 32.3X but at a noticeable premium to Capital One’s 12.5X.
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Bottom Line
Ahead of its Q4 report, American Express stock lands a Zacks Rank #3 (Hold). Although AXP still trades at a reasonable valuation, American Express’s Q4 report will need to reconfirm the company’s attractive outlook after such an extensive rally.
However, long-term investors could be rewarded from current levels but better buying opportunities may be ahead, especially in the event of a post-earnings selloff.
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American Express Company (AXP) : Free Stock Analysis Report
Mastercard Incorporated (MA) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report