American Express Co. (NYSE: AXP) is scheduled to release its fourth-quarter earnings report after the markets close on Thursday. Thomson Reuters consensus estimates are calling for $1.80 in earnings per share (EPS) and $10.56 billion in revenue. The same period of last year reportedly had $1.58 in EPS and $8.84 billion in revenue.
One issue that may have kept pressure on in 2018, outside of the overall plunge in financial stocks, was that Amex shares had gained a surprising 34% in 2017. Gains of that size tend to rob future gains. Amex has a consensus target price of $114.94, with an implied gain of about 20% ahead, or about 22% if you include its 1.6% dividend yield.
Warren Buffett and Berkshire Hathaway continue to remain the anchor shareholder for Amex. The company needs to make certain its clients do not see eroding credit metrics with delinquencies and charge-offs in 2019.
In a recent report Merrill Lynch detailed:
Given the broader market volatility and elevated uncertainty relating to the macro backdrop, we anticipate weaker sentiment for AmEx shares prospectively. We think AmEx will continue to deliver its somewhat unique brand of top-line and bottom line growth, though we think valuation will be restrained in a market backdrop highlighted by wild and unpredictable swings. Importantly, we think market volatility could persist, given palpable anxiety that the U.S. economy could slow further and heightened risk aversion.
So far in 2019, Amex has more or less kept pace with the broad markets, with its stock up just over 4%. In the past 52 weeks, the stock is down only 1%.
A few analysts weighed in on Amex ahead of the report:
- Morgan Stanley has an Equal Weight rating and a $111 price target.
- Wells Fargo has an Outperform rating with a $115 price target.
- Merrill Lynch has a Neutral rating with a $115 price target.
- Barclays has a Hold rating with a $118 price target.
- William Blair has an Outperform rating.
Shares of Amex were last seen trading at $99.05, in a 52-week range of $87.54 to $114.55. The consensus analyst price target is $113.83.
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