Sep. 28, 2015, 4:04 PM
- American Express (NYSE:AXP) declares $0.29/share quarterly dividend, in line with previous.
- Forward yield 1.58%
- Payable Nov. 10; for shareholders of record Oct. 9; ex-div Oct. 7.
Sep. 24, 2015, 12:21 PM
- Downward pressure on discount rates is #1 among six reasons, analyst John Hecht is cutting his price target on American Express (AXP -1.8%) to $70 from $85 (the stock is currently at $74.25). "Our expectation for continued pressure at American Express is a function of competition and our belief that several merchants may use the ability to steer as leverage for lowering their discount rate."
- The rest of the six: 2) Approaching saturation in its core demographic; 3) The Costco loss is a big challenge to overcome; 4) The brand has come under pressure; 5) Credit normalization may reflect a headwind; 6) Potentially negatively impacted by rising rates.
Sep. 10, 2015, 8:15 AM
Aug. 26, 2015, 7:22 PM
- Fidelity Investments is shopping around for better terms for a very popular and highly rated cash-back credit card, as it considers dropping American Express (NYSE:AXP) and Bank of America (NYSE:BAC) as its partners, Bloomberg reports.
- Visa (NYSE:V) and MasterCard (NYSE:MA) are wooing the No. 2 mutual fund provider, hoping to replace American Express on the Fidelity Investment Rewards American Express card, which routes 2% of purchases into a variety of brokerage, cash-management and savings accounts.
- A breakup would be the most recent blow to growth for AmEx, which is already splitting with Costco and JetBlue on their partner cards. Global Network Services -- where other banks issue AmEx-branded cards -- is the fastest-growing part of spending on AmEx's network.
- Co-branded cards now account for about 30% of all transactions.
- After hours: AXP -0.4%; BAC +0.2%; V +0.4%; MA +0.3%.
Aug. 20, 2015, 9:35 AM
- Discover (NYSE:DFS) achieved its highest-ever score in J.D. Power's 2015 U.S. Credit Card Satisfaction Study, with 828 out of a possible 1K points.
- It marks the first time since the survey began in 2007 that American Express (NYSE:AXP) hasn't gotten the number one ranking.
- Discover's new security feature - allowing customers to freeze a credit card through a mobile app - helped give the company its edge, says J.D. Power.
Aug. 14, 2015, 5:56 PM
- Berkshire Hathaway (BRK.A, BRK.B) disclosed in its latest 13F filing that it sold off its shares in Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV) during Q2, as it continued to cut its positions in energy companies.
- Meanwhile, BRK kept unchanged its stakes in its “Big Four” holdings American Express (NYSE:AXP), Coca Cola (NYSE:KO), Wells Fargo (NYSE:WFC) and IBM.
- Warren Buffett seemed to hint during a CNBC interview this week that BRK may have built up its IBM stake in the current quarter, saying "I love it when it goes down" when asked whether he was concerned about the stock’s recent performance.
- Buffett’s only new stake in the quarter was a 20M-share investment in auto paint maker Axalta Coating Systems (NYSE:AXTA), which BRK bought from Carlyle Group.
Aug. 13, 2015, 3:51 PM
- The short answer, according to BAML's Kenneth Bruce and Charlie Pratt: There's "no hidden value in the sum-of-the-parts."
- After activist investor ValueAct purchased $1B of American Express (AXP -0.4%), discussions have centered on the disposition of the Global Merchant Services business, but the BofA due believe this would actually reduce shareholder value.
- The closed-loop model of AmEx works best, they say, and valuations of both the network and merchant acquiring businesses should be discounted to reflect their competitive disadvantages outside of the closed-loop.
- The team's own sum-of-the-parts analysis valued AmEx at just $75 per share vs. $84 for the current model. "American Express’s value proposition is built around the closed-loop and abandoning it in the face of a difficult operating backdrop seems counter-productive."
- The team maintains an Underperform rating on the stock.
- Source: Barron's
Aug. 7, 2015, 1:33 PM
- Bloomberg reports activist ValueAct Capital has taken a $1B stake in American Express (NYSE:AXP).
- Shares have risen above $77 in response. They closed yesterday just $0.70 above a 52-week low of $74.30.
- Update (2:08PM ET): AmEx says it has been speaking with ValueAct, and looks forward to "continuing a constructive dialogue. Shares are now up 5.4%.
- Update 2: The full story is up. Bloomberg reports AmEx "isn't yet a core active target of ValueAct," while adding ValueAct "sees AmEx as a quality business with growth potential."
Jul. 24, 2015, 3:31 PM
- Goldman's (GS -1.8%) Q2 results confirmed the team's expectation of positive revisions to 2016 consensus EPS. Zions (ZION -0.7%) has "multiple catalysts" to reach improve profitability goals and EPS growth over the next three years.
- Guggenheim's four key investment themes: 1) Names levered to improving M&A, with Goldman being the best idea, followed by Morgan Stanley (MS -1.3%); 2) Restructuring stories, with Zions the best idea, but First Horizon (FHN -1%), Ally Financial (ALLY -1.8%), and BofA (BAC -1.6%) also worth looking at; 3) Idiosyncratic growth stories like MasterCard (MA +0.7%), Visa (V +4.5%), Synchrony Financial (SYF -2.4%), and Signature Bank (SBNY -0.8%); 4) Names with a distinct M&A catalyst in the regionals group like BB&T (BBT -1.5%), CIT Group (CIT -1.6%), and Springleaf (LEAF -1.4%).
- Mixed results from credit card companies affirm the team's preference for SYF, but the risk/reward at AmEx (AXP -1.4%) is improving. AmEx, CapOne (COF -13%), and Discover (DFS -2.7%) results show the boosted competition they face form the banks, which is slowing growth, and lifting marketing and rewards costs.
- Source: Barron's
- Previously: Capital One tumbles after earnings miss and trio of downgrades (July 24)
Jul. 23, 2015, 11:17 AM
- The bottom line at American Express (AXP -3%) was well ahead of consensus, notes Goldman, as lower-than-expected expenses and lower provisions offset declining revenues which fell short of hopes.
- Despite negative 5% EPS growth in 2015, the company reiterated its outlook for flat-to-down EPS for the full year, a return to EPS growth in 2016, and finally growth hitting the 12-15% long-term range in 2017. In Goldman's view, better-than-expected credit experience could make this year's EPS closer to "flat" vs. "down."
- Also on the positive side are encouraging Costco retention efforts in Canada which could bode well for the U.S. (50% of out-of-store spend was recaptured).
- Looking out, says Goldman, further clarity on the portfolio sale and U.S. retention efforts will likely be needed for the stock to outperform, but if EPS growth does hit that 12-15% range by 2017, it could translate into a higher multiple and stock price.
- Saying the upside trends for AmEx won't continue into H2, Jefferies sticks with its Hold rating and $85 price target.
- Earnings call transcript
- Previously: American Express -1.25% following earnings (July 22)
- Previously: American Express beats by $0.10, misses on revenue (July 22)
Jul. 22, 2015, 4:25 PM
- Q2 net income of $1.47B or $1.42 per share vs. $1.53B and $1.43 one year ago. Average ROE of 28.1%.
- Excluding business travel revenues, adjusted revenue growth of 1% Y/Y, of 5% on an FX-adjusted basis.
- Card-billed business of $262B up 2% Y/Y, up 6% on FX-adjusted basis. U.S. card-billed business of $181.6B up 5%.
- Average Card Member spending of $4, 272 flat from a year ago. U.S. card member spending of $4,611 up 1%. Outside U.S. of $3,311 down 8%.
- Worldwide net lending write-off rate of 1.4% down 10 bps from Q1, down 20 bps from a year ago.
- Marketing and promotion expense of $761M down 21% Y/Y. Card member rewards of $1.799B up 1%.
- Previously: American Express beats by $0.10, misses on revenue (July 22)
- AXP -1.25% after hours
Jul. 22, 2015, 4:15 PM
- American Express (NYSE:AXP): Q2 EPS of $1.42 beats by $0.10.
- Revenue of $8.28B (-4.1% Y/Y) misses by $180M.
Jul. 21, 2015, 5:35 PM| Jul. 21, 2015, 5:35 PM | 5 Comments
Jun. 25, 2015, 3:38 PM
- On a broad level, say analysts Mark DeVries and Jeremy Campbell, financials always look "cheap" relative to the overall market during bull rallies as the P/E gap between them and the S&P 500 widens further. And today, American Express (AXP -0.8%) certainly screens as cheap relative to both the S&P 500 and its historical P/E.
- The company, however, looks to be shifting from a growth story to an expense-cutting story, and the team suggests this is deserving of a lower multiple than what investors are used to. "We struggle to see a return to 8%+ revenue growth, we see more downside risk to American Express’s multiple than a return to the revenue grower premium."
- The stock currently trades at 14.6x forward earnings versus MasterCard at 25.6x and Visa at 26.7x.
Jun. 24, 2015, 1:09 PM
- Among the changes: Steve Squeri is promoted to Vice Chairman at AXP, where he'll oversee OPEN and Enterprise Growth. He'll report to CEO Ken Chenault.
- President of Global Network and International Card Services Doug Buckminster will add responsibility for One Europe. He'll also report to the CEO.
- President of Consumer Products & Services Josh Silverman and President of Global Merchant Services Anre Williams will report to Chenault.
- Previously: AmEx president unexpectedly passes away (May 29)
Jun. 19, 2015, 7:33 AM
- Following a court's ruling finding American Express' (NYSE:AXP) behavior anti-competitive, the company will stop the practice of prohibiting merchants who accept its cards from steering customers to competitors.
- Beginning next month, merchants will be able to offer discounts or rebates to customers paying with a Visa (NYSE:V) or MasterCard (NYSE:MA), or display signs saying which card they prefer.
- "These fees are a part of doing business, but you’d be silly not to consider all of your options,” says a restaurant owner who still has a "We prefer Visa" sticker near his front door, a relic of a 90s advertising campaign.
- Source: WSJ's Robin Sidel
- Previously: AmEx loses bid to block steering rules (June 17)
American Express Co. is a global payments and travel company. The company, through its subsidiaries, offers products and services, including charge and credit payment card products and travel-related services to consumers and businesses around the world. American Express operates through four... More
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