Banking, finance, and taxes

What to Expect From American Express Earnings

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American Express Co. (NYSE: AXP) is scheduled to report its fiscal second-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for $1.13 in earnings per share (EPS) on revenue of $8.34 billion. In the same period of the previous year, it posted EPS of $1.22 and $8.39 billion in revenue.

This company may have Warren Buffett and Berkshire Hathaway as the largest shareholder, and so far in 2016 its performance is practically in line with the market, but the good news stops there. This was among the worst Dow stocks of 2015.

Having the highest income client base hasn’t helped American Express, and losing Costco just added insult to injury. The dividend is underwhelming as well, and actually turning itself around may be hard considering that American Express already has exited or paired down on so many operations.

Recently, a strong U.S. dollar hurt American Express in its overseas markets, which in turn precipitated poor earnings over the course of the year. However this was not the case for its counterpart, Visa.

Ahead of the earnings report, a few analysts weighed in on American Express:

  • Credit Suisse has an Underperform rating with a $71 price target.
  • D.A. Davidson initiated coverage with a Neutral rating and a $70 price target.
  • Goldman Sachs has a Neutral rating with a $72 price target.

So far in 2016, American Express has stayed more or less even the broad markets, with the stock down about 9%. However, over the past 52 weeks the number gets a little worse with the stock down nearly 27%.

Shares of American Express were trading up 1.5% to $63.99 on Thursday, with a consensus analyst price target of $78.40 and a 52-week trading range of $61.29 to $86.18.

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