American Express CompanyNYSE
Thu, Oct. 20, 1:42 PM
- CFRA's Erik Oja is using American Express' (AXP +10.4%) whopper of a move today to cash in his chips, downgrading to Hold from Buy, and cutting the price target to $68 from $70 (current is $67.68).
- AmEx's peers have a median forward P/E ratio of 11x and a P/E-to-growth (PEG) ratio of 1.7x. Using those numbers leads Oja to that $68 12-month target.
- "We think American Express executed well in Q3, but still see considerable competitive challenges."
Thu, Oct. 20, 12:59 PM
Thu, Oct. 20, 9:17 AM
Thu, Oct. 20, 7:18 AM
Wed, Oct. 19, 5:35 PM
Wed, Oct. 19, 4:55 PM
- American Express (AXP +2%) has picked up 5.2% after hours following Q3 earnings where it soundly beat profit expectations and raised full-year guidance as it embraced the loss of Costco business.
- EPS dropped 3% in headline terms; excluding a charge for restructuring, it was exactly flat Y/Y at $1.24.
- It now expects GAAP EPS for the full year of $5.65-$5.75, and adjusted EPS of $5.90-$6.00 (above consensus for $5.60).
- Excluding the year-ago impact of Costco, adjusted revenues grew 5% as cardmember spending rose, as did net interest income and net card fees. Revenues fell 5.1% on an unadjusted basis.
- Effective tax rate for the quarter was 34% vs. a year-ago 35%. Return on equity came to 26%, down from a year-ago 27%.
- Conference call to come at 5 p.m. ET.
- Press Release
Wed, Oct. 19, 4:06 PM
Tue, Oct. 18, 5:35 PM
Mon, Oct. 17, 9:52 AM
- Customers of offerings like JPMorgan's (NYSE:JPM) Sapphire Reserve card can't believe their good fortune, but bank shareholders can't be faulted for wondering whether there's going to be any profits from the growing rewards war.
- "You have five or six big national players and they are going around killing one another," says Oppenheimer's Chris Kotowski.
- It's the banking version of a loss leader. The upfront rewards are well above the annual fee, but if customers hold onto the card after the first year, and better yet hold a balance, they could become profitable.
- "It has been a huge success," says the bank's card boss, Kevin Watters. Speaking on Friday's earnings call, CFO Marianne Lake declined to say how much card debt customers need to take on before a profit can be turned.
- Citigroup's (NYSE:C) spending on cards has also been aggressive, but personal finance gurus say its Prestige premium card needs to up its rewards game to compete with JPMorgan's offering.
- Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) also naturally want to boost card business, but until now have mostly refrained from joining the war, and earlier this month, American Express (NYSE:AXP) boosted rewards on its Platinum card, though saying publicly the move wasn't in response to JPMorgan and Citi.
Thu, Oct. 13, 2:40 PM
- "Credit card rewards continue to spiral skywards," says Evercore ISI's David Togut, putting American Express (AXP -0.5%) in the tough spot of either matching MasterCard (MA -0.6%) and Visa (V -0.4%) and seeing returns decline, or standing its ground and losing business.
- Chase's Sapphire Reserve card and Citi's Prestige card currently offer better rewards than AmEx's Platinum card, notes Togut. If AmEx wants to match, it will have to be more aggressive in cutting costs if it doesn't want to slash earnings guidance.
- AmEx may be trading at just 11x earnings vs. its historical 14x, but Togut suggests it's a value trap. He's staying on the sidelines.
Thu, Oct. 6, 7:16 AM
- A combination of softer-than-hoped revenues and higher-than-expected expenses isn't a good thing, says analyst Bill Carcache, downgrading American Express (NYSE:AXP) to Reduce from Neutral. He notes Q3 will be the first in which company results will exclude Costco business.
- The "tug of war between bulls and bears [will] intensify" in Q3, he says, and 2016 will likely end up marking year four of market share losses in U.S. billings.
- The new price target of $56 is down from $62 and suggests 13% downside from last night's close.
- Shares -0.6% premarket
Tue, Sep. 27, 10:43 AM
Tue, Sep. 27, 9:38 AM
Tue, Sep. 27, 3:43 AM
- A federal appeals court has tossed an antitrust judgment against American Express (NYSE:AXP), ruling the credit-card company can continue barring merchants from steering customers to cards with lower fees.
- The decision is a major victory for AmEx, which wants to ensure that its customers, who pay higher-than-average membership fees, do not encounter any barriers to use.
Tue, Aug. 30, 7:48 AM
- Whether American Express (NYSE:AXP) can hit its 2017 profit targets is a top investor question and Citigroup's Donald Fandetti thinks the company can do so in a "clean manner." He's not seeing a lot of upside to those targets however, and believes AmEx will need to show revenue growth improvement to drive meaningful multiple expansion.
- Fandetti retains his Buy rating and $70 price target.
Thu, Aug. 4, 7:31 AM
- Berkshire's (BRK.A, BRK.B) crossing the 10% ownership threshold in Wells Fargo (NYSE:WFC) triggered a series of regulatory hurdles, including one known as Regulation O that restricts how much credit a bank can extend to a major shareholder.
- Berkshire, of course, is a conglomerate of dozens of companies, many of which do business with Wells Fargo. Of particular concern, according to the report, is American Express (NYSE:AXP), which is a sizable customer of Wells, and in which Berkshire owns a 16% stake.
- Buffett and Co. has asked the Fed or approval to maintain or even boost that 10% stake in Wells. A Fed denial of the request could mean The Oracle would have to sell some of that holding.