Banking, finance, and taxes

What to Expect When American Express Reports First Thing Friday

Chris Lange

Published: January 23, 2020 11:40 am

Last Updated: January 30, 2020 10:48 am

American Express Co. (NYSE: AXP) is set to report its fourth-quarter financial results before the opening bell on Friday. Analysts are calling for $2.01 in earnings per share (EPS) and $11.36 billion in revenue. The same period of last year reportedly had $1.74 in EPS and $10.47 billion in revenue.

In the quarter, Amex raised its quarterly payout to $0.43 per share from $0.39. That is a 10.3% hike, and the new payout and a $118.59 share price at the time implied a 1.45% yield. While that might seem impressive compared with the huge banks. It still blows away the yields offered by Visa and Mastercard.

In its most recent quarter, Amex’s consolidated total revenues net of interest expense were $11.0 billion, up 8% from $10.1 billion in the third quarter of 2018. Excluding the impact of foreign exchange rates, adjusted revenues net of interest expense grew 9%. The increases reflected higher Card Member spending, net interest income and card fees.

At that time, management commented that it was pleased the breadth and consistency of revenue growth, driven by a well-balanced mix of Card Member spending, loans and membership revenues from fee-based products, which grew 19% and exceeded $1 billion during that quarter for the first time.

Excluding Thursday’s move, American Express stock had outperformed the broad markets with a gain of about 32% in the past 52 weeks. In just the past quarter, the shares were up over 10%.

A few analysts weighed in on Amex ahead of the report:

• Nomura has a Buy rating.
• William Blair has an Outperform rating.
• Wells Fargo has a Buy rating.
• Robert Baird has a Neutral rating and a $124 price target.
• Morgan Stanley rates it as Overweight with a $149 price target.

Shares of Amex were last seen down less than 1% on the day to $130.64, in a 52-week range of $99.38 to $132.27. The consensus price target is $133.57.