Mon, Oct. 5, 9:27 AM
- After a tough stretch for the stock - down more than 20% YTD - Discover (NYSE:DFS) trades at a relative P/E of 62% vs. the S&P 500, well below the long-term average of 70%, says analyst Kevin St. Pierre, upgrading to Outperform. His $69 price target is 33% above Friday's close.
- St. Pierre figures Discover is sitting on about $5.50 per share of excess capital above the target CET1 ratio of 11%.
- He also takes note of Discover's network - it has the same capacity as that of MasterCard and Visa, but is massively underutilized, says St. Pierre.
- He now has Outperform ratings on all of the card issuers. His favorites over the next 12 months are Capital One (NYSE:COF) and Synchrony Financial (NYSE:SYF), over the next two-three years DIscover, and American Express (NYSE:AXP) over the longer term.
- DFS +1.4% to $52.92 premarket.
Fri, Aug. 7, 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."
Thu, Jul. 23, 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)
Mon, Apr. 27, 12:56 PM
- At year's end, American Express (AXP -1.2%) had more employees than any of its publicly-traded card issuing and payment network peers, say Bill Carcache and Yuman Lui. This includes Capital one, which operates a larger physical bank infrastructure.
- The two note AmEx's CEO recently emphasizing how digitization of payments is transforming the industry and how he's got expense levers to pull. Adding those two comments together, the team looks for AmEx to "opportunistically shrink its employee base." Perhaps the intervention of an activist might speed up the process?
- Source: Barron's
- Previously: AmEx lower as another sell-sider bails (April 27)
Fri, Apr. 17, 11:02 AM
- "If any doubt remained, it is very clear that dollar strength is a major problem right now for large multinationals," says Topeka, after going over American Express' (AXP -4.5%) Q1 results, and noting the corporate card business slowdown wasn't isolated to any particular industry.
- AmEx, notes the team, has 31% of its volume outside of the U.S. and is highly dependent on cross-border and business-related travel. 'This reads negatively for Mastercard (MA -1.4%), and, less so, Visa (V -1.4%)."
- AmEx earnings call transcript and presentation slides.
- Previously: AmEx beats on bottom line, but outlook still dour (April 16)
Tue, Apr. 7, 7:21 AM
Wed, Mar. 25, 3:12 PM
- In no surprise, American Express (AXP -1.3%) CEO Ken Chennault says the company is committed to its long-term 8%+ revenue growth target, and continues to see 12-15% EPS growth over time (though it's failed to hit that goal of late). Despite challenges, the company also doesn't back off of its ROE target of 25%.
- Webcast and presentation slides
- Helping EPS growth, of course, is a strong capital position allowing the continuation of buybacks, and AmEx repurchased 3.6% of the float in 2012, 4.6% in 2013, and 3.5% in 2014. After being flat-to-down in 2015, EPS growth should turn positive in 2016, says the company, and hit the 12-15% target in 2017.
- The stock turned higher as the presentations began at 1:30 ET, but has since returned to session lows. Not helping is Charlie Munger, speaking at the Daily Journal annual meeting, suggesting AmEx's "moat" is less than it once was.
Thu, Mar. 12, 12:31 PM
- American Express (AXP +2%) "shined" in its stress test, says Susquehanna's James Friedman, noting the new buyback of $6.6B vs. last year's $4.4B (the dividend was boosted 11.5% as well).
- Share count should fall by 5.7% through the end of 2016 Q2 vs. a 3.6% decline last year, says Friedman, who thus boosts his 2016 EPS estimate to $5.96 from $5.85. 2015 EPS is now expected at $5.58 from $5.56 previously.
- Previously: American Express boosts payout by 11.5% after CCAR approval (March 11)
Mon, Mar. 2, 8:13 AM
- Citigroup (NYSE:C) will become the exclusive co-issuer of Costco's (NASDAQ:COST) co-brand credit cards, and Visa (NYSE:V) will replace American Express (NYSE:AXP) as the credit card network for Costco in the U.S. and Puerto Rico, beginning April 1, 2016.
- On CNBC as the news hit, AmEx shareholder Warren Buffett: Citi won't get rich off the Costco deal.
- Source: Press Release
- C +0.6%, V +2.4% premarket
Thu, Feb. 26, 2:27 PM
- "We believe the company will be able to restore its earnings power sooner than expected,' says Deutsche's David Ho in his AmEx (AXP +1.2%) upgrade, noting management now has "breathing room" to manage earnings expectations this year given a "minimal" revenue drag from Costco and efficiency gains coming online in H2.
- AmEx, he says, also has the largest amount of excess capital among consumer finance stocks, giving the company ample room to deploy capital to new partnerships, acquisitions, and eventually higher dividends and buybacks.
- Finally, at 13.7x 2016 estimates, American Express is being valued at a 30-35% discount to Visa and MasterCard.
- Previously: American Express up 1% as Deutsche buys the dip (Feb. 26)
Thu, Feb. 26, 8:41 AM
- AmEx (NYSE:AXP) has had a tough run of late, losing its Costco business as well as an antitrust lawsuit, but the company's feeling its oats enough to hike interest rates on some customers.
- Seeing value after a 12% decline in the stock YTD, Deutsche upgrades to Buy from Hold, with price target lifted to $90 from $88.
- Shares +1% premarket
- Previously: AmEx raising interest rates for first time in five years (Feb. 25)
- Previously: AmEx vows to appeal antitrust ruling (Feb. 19)
- Previously: Analysts weigh in on American Express after Costco loss (Feb. 13)
Thu, Feb. 19, 12:07 PM
- "The court's ruling will not provide any benefit to consumers and will, in fact, harm competition by further entrenching the two dominant networks," says American Express (AXP -2.2%), responding to its loss in an antitrust lawsuit, and vowing to appeal.
- Filed in 2010 and heard by a federal judge last year, the case is about AmEx's prohibiting merchants who accept its cards from steering customers towards those cards processed by rivals Visa (V +0.3%) and MasterCard (MA +1.7%), or debit cards.
- “The most damaging thing that can happen to the American Express brand is when our card members are discriminated against at the point of sale,” said company CEO Ken Chenault when he testified at last year's trial.
- It's another 2015 blow for AmEx which last week announced an end to its long-time exclusive partnership with Costco in the U.S. The stock's now lower by about 16% YTD.
- Previously: AmEx lower by 1.9% after losing antitrust suit (Feb. 19)
Thu, Feb. 19, 10:32 AM
- A federal judge rules American Express (AXP -1.9%) violated antitrust laws in a case brought by the DOJ and a number of states alleging the company set rules preventing merchants from offering discounts/incentives to customers using less expensive forms of payment.
- Previously: AmEx to face antitrust lawsuit (July 4, 2014)
Thu, Feb. 12, 2:43 PM
- "We wouldn’t be surprised to see a winner announced very soon and we’d imagine it is competitive," says Citigroup's Donald Fandetti, putting Capital One (COF +2.8%) high on the list as a possible winner
- As for American Express (AXP -6.4%), Fandetti say's today's big decline pretty much prices in the earnings hit from losing Costco exclusivity. Even with another possible negative catalyst out there - the DOJ anti-competition suit - Fandetti reiterates his Buy rating on the stock. It's CapOne, however, that remains his team's Top Card Pick for 2015.
- Previously: AmEx down 6% on scrapping of Costco exclusivity (Feb. 12)
- Previously: AmEx and Costco ending U.S. partnership next year (Feb. 12)
Thu, Feb. 12, 12:30 PM
- American Express' (AXP -6%) Costco relationship accounted for 8% of AmEx's billed business, 20% of worldwide loans, and 10% of cards in force, says Jefferies' John Hecht, so this isn't a minor loss.
- Hecht expects EPS growth this year will now be down-to-flat. Beyond 2016, AmEx management expects recent investments and initiatives to allow a return to 12-15% EPS growth. There's also the transfers of merchant agreements which could result in a portfolio sale and one-time gain.
- Previously: AmEx and Costco ending U.S. partnership next year (Feb. 12)
Thu, Feb. 12, 9:15 AM| Thu, Feb. 12, 9:15 AM | 5 Comments
AXP vs. ETF Alternatives
Other News & PR