Can American Express Achieve FY24 Growth Target? This Analyst Thinks So

Piper Sandler analyst Kevin J. Barker upgraded American Express Co AXP to Neutral from Underweight at an increased price target of $151 from $150.

Although the analyst expects revenue growth to slow heading into 2024 and headwinds from weaker credit, he projects the company to deliver EPS growth of ~10% over the next two years. 

The analyst notes that the consensus estimates imply AXP will miss the company's target of 10% revenue growth and 15% EPS growth in 2024, with expected revenue growth of 9% and EPS growth of 11% for the year. The analyst writes that AXP's capacity to defend the revenue growth target will be more difficult due to macro headwinds and expects the company to take initiatives to help achieve the EPS growth target of 15%.

Barker forecasts network volume to decline to 4% before accelerating to 6%-7% in late 2024. with a risk of a higher slowdown within the Millennial/Gen-Z generations due to the re-starting of federal student loan payments in Q4 (32% of AXP's U.S. customers). 

The analyst maintained the FY24 EPS estimate of $11.64 as slightly higher net interest income is projected to be offset by increased credit provisions and slower discount fee revenue. 

Barker raised the FY24 revenue estimate to $65,475.8 million from $64,565 million earlier. 

On the other hand, the FY25 EPS estimate is anticipated to be $13.10, assuming a revenue growth of ~6%.

Also Read: American Express Q3 Earnings: Double Digit Revenue And Profit Growth, Network Volumes Surge

Price Action: AXP shares are down 0.13% at $144.40 on the last check Tuesday.