American Express Co. (NYSE: AXP) is scheduled to release its most recent quarterly results after the markets close on Thursday. The consensus estimates from Thomson Reuters are $1.54 in earnings per share (EPS) and $8.72 billion in revenue. The fourth quarter of last year reportedly had EPS of $0.88 and $8.02 billion in revenue.
Financial services companies like Amex are projected to be among the major beneficiaries of the recent changes to U.S. tax laws. In the near term, it will take a hit from having to reevaluate its deferred tax assets. In the longer term, though, the rate cut from 35% to 21% will benefit the firm, as will continued rate hikes by the Federal Reserve and expected increases in consumer spending as take-home pay rises.
Just about the only thing that could pose a problem for this credit card giant is a rise in net charge-offs. Keep in mind that Amex may have a bit of an advantage here due to the higher credit quality of its card users.
Although 2018 has been off to a roaring start for the markets, American Express is only up about 1.5% year to date. However, over the past 52 weeks the stock is up over 31%. American Express was the 10th best-performing Dow Jones Industrial Average stock in 2017, posting a share price gain of 34.1%.
Ahead of the earnings report, a few analysts weighed in on Amex:
- Sandler O’Neill has a Buy rating.
- JPMorgan has a Neutral rating with a $90 price target.
- Wells Fargo has an Outperform rating with a $115 target.
- BMO Capital Markets has a $103 price target.
- Stephens has a Hold rating and a $97 price target.
- Instinet has a Buy rating with a $110 price target.
- Deutsche Bank has a Buy rating with a $118 target price.
- Keefe, Bruyette & Woods has a Buy rating and a $116 target.
Shares of Amex traded at $100.24 ahead of its earnings report, with a consensus price target of $106.12 and a 52-week range of $75.39 to $102.39.