What to Look for in American Express Q1 Earnings

Banking, finance, and taxes

Published: April 20, 2016 11:35 am

Last Updated: January 13, 2020 10:33 am

American Express Co. (NYSE: AXP) is scheduled to report its first-quarter financial results after the markets close on Wednesday. The consensus estimates call for $1.35 in earnings per share (EPS) on $7.99 billion in revenue. In the same period of the previous year, it posted EPS of $1.48 and $7.95 billion in revenue.

This company may have Warren Buffett and Berkshire Hathaway as its largest shareholder, but so far in 2016 its performance has lagged the market. This was among the worst Dow stocks of 2015, similar to this year thus far.

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

Recently, a strong U.S. dollar hurt Amex 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 Amex:

Deutsche Bank reiterated a Buy rating.
Credit Suisse reiterated an Underperform rating with a $62 price target.
Barclays reiterated a Hold rating.
Sanford Bernstein reiterated an Outperform rating with a $77 price target.
Macquarie reiterated a Sell rating.

So far in 2016, Amex has underperformed the broad markets, with the stock down about 6%. Over the past 52 weeks, the stock is down 16%.

Shares of Amex were trading up 1.4% ahead of earnings at $64.26. The consensus analyst price target is only $64.57, and a 52-week trading range is $50.27 to $81.92.