Banking, finance, and taxes

What to Expect From American Express Earnings

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American Express Co. (NYSE: AXP) is scheduled to release its most recent quarterly results after the markets close on Wednesday. The Dow Jones Industrial Average is hitting all-time highs and has even eclipsed the 23,000 mark, largely thanks to Boeing, but Amex has played a big role in this run as well. With earnings on the way, this company could help push the Dow even higher.

So far this year, Amex is the seventh best-performing Dow stock, with shares up about 24% year to date. Over the past 52 weeks, the stock is up closer to 53%.

As for the results, the consensus estimates from Thomson Reuters are $1.48 in earnings per share (EPS) and $8.29 billion in revenue. The same period of last year reportedly had EPS of $1.20 and $7.77 billion in revenue.

Some would argue that Amex has been an unexciting stock for quite some time. That being said, this company has moved above and beyond the loss of its Costco deal and other brand woes. Its shares have recovered handily from the Great Recession, but the reality is that this stock has not fully recovered from where it peaked in the mid-$90s back in the summer of 2014.

The company announced in September that it is increasing its quarterly dividend to $0.35 per share payable on November 10, 2017, to shareholders of record on October 6, 2017. This is a three cent per quarter hike, and it is the same three-cent hike we have seen in the past few years. In percentage terms, this is roughly a 9% dividend hike.

Currently, Amex ranks around the top five lowest dividend yields among the Dow’s 30 companies. The new yield still will be twice that of rival Visa and is better than financial giant Goldman Sachs, but their business models are quite different.

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

  • Compass Point downgraded it to a Neutral rating from Buy.
  • Wells Fargo has an Outperform rating with a $105 price target.
  • Merrill Lynch has a Buy rating and a $102 price target.
  • Credit Suisse has a Sell rating with a $79 price target.
  • Buckingham Research has a Neutral rating with a $92 price target.
  • Morgan Stanley has an Equal Weight rating and an $89 price target.

Shares of American Express were last seen at $91.90 with a consensus analyst price target of $90.52 and a 52-week range of $59.88 to $93.35.

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