American Express Company AXP, will be announcing its fourth-quarter earnings on Jan. 26. Wall Street expects $2.64 in EPS and $16 billion in revenues as the company reports before market hours.

American Express is one of the leading card issuers in the U.S. It’s known for its top-notch customer service and some of the best rewards available. American Express stock has moved just over 20% in the past year.

Here's what analysts will be focusing on and how the stock currently maps against Wall Street estimates.

Amex Investment Thesis

American Express presents a compelling investment thesis, supported by several key factors. The company demonstrated its financial strength with six consecutive quarters of record revenue and the expectation for a seventh strong quarter in the fourth quarter suggests continued resilience, especially during the holiday season.

Despite concerns about credit card metrics, the return to seasonality in November bodes well for American Express, although the 58% increase in Provisions for Credit Losses in the third quarter demands attention to gauge economic confidence in the fourth quarter. American Express’ robust international income, more than doubling YoY to $387 million in the third quarter, positions it to offset potential domestic softness.

Notably, the consistent reduction in shares outstanding, totaling 9% since March 2021, reflects disciplined capital management and significant annual dividend savings.

American Express is often undervalued due to inaccurate comparisons with traditional banks. Its bank holding company status brings in diversified revenue streams, lower borrowing costs and access to Federal Reserve funding.

Despite facing risks like partner policy changes and increasing delinquencies, American Express’ high-moat business, consistent growth and share buybacks make it an attractive investment. Add in a well-supported 1.3% dividend, and there may be a recipe for continued success.

Also Read: Why JPMorgan Is Bullish On American Express, Bearish On Rocket Companies

Amex Analysts' Focus & Consensus Ratings

Q4 Analysts' Focus: Analysts will be closely watching any increases in Provisions for Credit Losses in the fourth quarter. While international income is robust, domestic income will be under watch for any potential recovery and outlook. The impact of partner policy changes and increasing delinquencies on the business and its financials will also be on analysts’ radar.

Ratings & Consensus Estimates: Consensus analyst ratings on American Express stock stand at Neutral currently with a price target of $149.30. Although the more recent analyst ratings received by the company have their target price ranging from $190 to $235.

AXP Price Action: American Express stock was up 1.01% at $187.71 Thursday at publication.

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