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Investing.com - American Express (NYSE:AXP), a $215 billion market cap financial services giant, maintained its Neutral rating from Monness, Crespi, Hardt, with the research firm citing concerns about slowing travel expenditure trends despite solid quarterly results. According to InvestingPro data, the stock is currently trading near its Fair Value, with 7 analysts recently revising their earnings estimates upward for the upcoming period.
The financial services company reported modest earnings per share upside in the second quarter of 2025, while reiterating its full-year 2025 EPS guidance of $15.00-$15.50. With a current P/E ratio of 21.44x and revenue growth of 9.05% over the last twelve months, the company maintains strong fundamentals. Monness established a fair value estimate of approximately $285 for American Express stock, based on 16 times calendar 2026 earnings per share.
Billed business growth failed to accelerate within the U.S. Consumer Services segment, with domestic growth actually slowing by 20 basis points. The firm highlighted particular weakness in airline spending, which showed 0% growth and contributed to broader slowdowns in the travel and entertainment category, while lodging growth softened to 4%.
Monness noted that goods and services spending grew at 7%, outpacing travel and entertainment at 6%, potentially indicating increased consumer selectivity in spending habits. The analyst suggested this trend might signal that higher-end consumers are becoming more cautious with their discretionary spending.
Competition emerged as a discussion topic during the earnings call, which Monness believes could continue to pressure American Express’s valuation multiple, reinforcing the firm’s decision to maintain its Neutral stance despite acknowledging the company’s fundamental strength. InvestingPro analysis reveals the company maintains strong financial health with an overall score of ’GOOD’, and offers additional insights through its comprehensive Pro Research Report, available to subscribers along with 12+ exclusive ProTips about AXP’s performance and outlook.
In other recent news, American Express reported a strong performance in the second quarter of 2025, with earnings per share (EPS) of $4.08, surpassing the forecasted $3.87. The company also exceeded revenue expectations, achieving $17.86 billion against a $17.7 billion forecast. The results included a 9% year-over-year increase in revenue, reaching a record $17.9 billion, and a 17% rise in EPS, excluding extraordinary items. American Express issued 3.1 million new cards during the quarter, with notable growth in the U.S. Consumer segment. Despite these positive developments, shares fell 3.17% in pre-market trading, reflecting broader market concerns. Analysts have noted the company’s reaffirmation of its full-year revenue growth guidance of 8-10% and projected EPS between $15.0 and $15.5. The company continues to focus on premium card offerings and partnerships, such as its collaboration with Coinbase (NASDAQ:COIN) for digital currency rewards. American Express maintains a strong return on equity of 36% for the quarter, showcasing its robust financial health.
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