American Express (AXP) is the worst Dow Jones stock Friday after the global payments company reported mixed results for its third quarter and raised its full-year profit forecast.
In the three months ended September 30, American Express said revenue increased 8.2% year over year to $16.6 billion as card member spending rose 5.8% to $387.3 billion. Its earnings per share (EPS) were up 5.8% from the year-ago period to $3.49.
The results were mixed compared with analysts' expectations. Wall Street was anticipating revenue of $16.7 billion and earnings of $3.28 per share, according to Yahoo Finance.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"We had another strong quarter that reflects the earnings power of our business model and our continued investments for growth," said American Express CEO Stephen J. Squeri in a statement. "We continued to attract large numbers of new premium Card Members with 3.3 million new card acquisitions, while maintaining our high retention rates, excellent credit performance, and expense discipline."
As a result of its strong financial performance in the first nine months of 2024, AXP raised its full-year profit forecast. The company now anticipates EPS in the range of $13.75 to $14.05, up from its previous forecast of $13.30 to $13.80. It still expects revenue growth of around 9%.
"Our continued momentum demonstrates the sustainability of our product refresh strategy and the growth it is driving in our portfolio," Squeri said.
Is American Express stock a buy, sell or hold?
Heading into today's trading, American Express was one of the best Dow stocks so far this year, second only to Walmart (WMT) in terms of price return. Still, Wall Street remains on the sidelines when it comes to the blue chip stock.
According to S&P Global Market Intelligence, the average analyst target price for AXP stock is $265, which is a discount to where shares are currently trading. Meanwhile, the consensus recommendation is Hold.
Financial services firm BofA Securities is one of those with a Neutral (Hold) rating on the large-cap stock, along with a $263 price target.
"We rate AXP at Neutral as we think risk/reward is balanced," wrote BofA Securities analyst Mihir Bhatia in an August 21 note. "AXP's strong execution and card acquisitions are a positive but this is balanced by a tough spend backdrop and a premium valuation."
Related Content
-
USPS Is Raising Prices for Holiday Shipping: Dates and Increases You Need to KnowWhat the USPS's $16 price hike means for your wallet and your small business.
-
July CPI Report Ignites a Risk-On Rally: Stock Market TodayMarket participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Ignites a Risk-On Rally: Stock Market Today
Market participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust SellsUnderstanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think AgainThere are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
Stocks Slip Ahead of July CPI Report: Stock Market TodayThe latest inflation updates roll in this week and Wall Street is watching to see how much of an impact tariffs are having on cost pressures.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's GuideFor Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.
-
Financial Planner vs Investment Manager: Who's the Better Value for You?When markets are shaky, who do you trust with your money? A recent study provides useful insights into the value that different financial professionals offer.
-
I'm a Financial Adviser: This Is How You Could Be Leaving Six Figures in Social Security on the TableClaiming Social Security is about more than filing paperwork and expecting a check. When you do it and how you do it have huge financial implications that last the rest of your life.
