American Express Co. (NYSE: AXP) released its first-quarter earnings report after the markets closed on Wednesday. A fair number of analysts were impressed by these results and decided to weigh in on the stock. Looking back in 2016, this stock was one of the worst performers in the Dow, so these earnings beg the question of whether Amex has hit a turning point.
24/7 Wall St. has included an analyst montage detailing how they view this stock after earnings to give a panorama view of where this stock may be headed.
The credit card giant said it had $1.45 in earnings per share (EPS) on $8.09 billion in revenue. The Thomson Reuters consensus estimates had called for $1.35 in EPS on revenue of $7.99 billion. In the same period of last year, Amex posted EPS of $1.48 and $7.95 billion in revenue.
Amex reported the following segment results for the first quarter:
- U.S. Card Services reported net income of $694 million, up 5% from $659 million a year ago.
- International Card Services reported net income of $188 million, down 5% from $197 million a year ago.
- Global Commercial Services reported net income of $485 million, down 6% from $517 million a year ago.
- Global Network & Merchant Services reported net income of $357 million, down from $369 million a year ago.
- Corporate and Other reported a net loss of $298 million. This compared to a net loss of $217 million a year ago.
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These results from the quarter reflect investment spending significantly increasing. Management believes to be initiatives to grow the business by expanding its membership base and gaining a greater share of their overall spending and borrowing.
Kenneth I. Chenault, chairman and CEO of Amex, commented:
First quarter results were in line with the financial outlook we provided last month at our Investor Day. Despite strong competition throughout the payments industry, we generated a 4% increase in FX-adjusted revenues. Those revenues reflected strong, underlying growth in our lending portfolio, along with higher Card Member spending and fee income. Our 6 percent rise in Card Member spending was partially offset by a lower merchant discount rate and the higher costs associated with cash back rewards.
A few analysts weighed in on Amex after the company reported earnings:
- BMO has a Market Perform rating and raised its price target to $76 from $71.
- D.A. Davidson raised its price target to $67 from $66.
- Goldman Sachs has a Neutral rating and lowered its price target from $64 to $62.
- Jefferies has a Hold rating and raised its price target to $60 from $58.
- KBW raised its price target to $74 from $67.
- Nomura has a Neutral rating and raised its price target to $62 from $56.
- RBC has an Underperform rating and lowered its price target from $58 to $57.
- Susquehanna has a Positive rating but lowered its price target from $87 to $78.
Shares of Amex closed Friday at $65.93, with a consensus analyst price target of $66.13 and a 52-week trading range of $50.27 to $81.92.
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