American Express Stock Sinks As Market Gains: Here's Why

American Express AXP ended the recent trading session at $266.21, demonstrating a -0.41% swing from the preceding day's closing price. This change lagged the S&P 500's 0.25% gain on the day. On the other hand, the Dow registered a gain of 0.2%, and the technology-centric Nasdaq increased by 0.56%.

Prior to today's trading, shares of the credit card issuer and global payments company had gained 5.29% over the past month. This has outpaced the Finance sector's gain of 1.86% and the S&P 500's gain of 1.65% in that time.

The investment community will be paying close attention to the earnings performance of American Express in its upcoming release. The company is slated to reveal its earnings on October 18, 2024. It is anticipated that the company will report an EPS of $3.26, marking a 1.21% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $16.66 billion, reflecting an 8.28% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $13.13 per share and a revenue of $65.99 billion, signifying shifts of +17.13% and +9.04%, respectively, from the last year.

Investors should also pay attention to any latest changes in analyst estimates for American Express. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.04% higher. American Express is currently a Zacks Rank #2 (Buy).

Looking at its valuation, American Express is holding a Forward P/E ratio of 20.36. Its industry sports an average Forward P/E of 11.23, so one might conclude that American Express is trading at a premium comparatively.

Investors should also note that AXP has a PEG ratio of 1.48 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AXP's industry had an average PEG ratio of 1.1 as of yesterday's close.

The Financial - Miscellaneous Services industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 54, positioning it in the top 22% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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