EU and US could reach trade deal this weekend - Reuters
Investing.com - American Express (NYSE:AXP), a prominent player in the Consumer Finance industry with a market capitalization of $214.4 billion, reported second-quarter earnings that exceeded analyst expectations, with EPS of $4.08 versus the consensus estimate of $3.90. According to InvestingPro data, the company maintains a GOOD financial health score, with liquid assets exceeding short-term obligations.
UBS analyst Erika Najarian maintained a Neutral rating on American Express with a $340.00 price target following the earnings release. The firm noted that investors had positioned negatively ahead of the results, which may influence market reaction. InvestingPro analysis shows analyst targets ranging from $255 to $375, with 11 analysts recently revising their earnings expectations downward.
The credit card company posted revenue growth of 9%, accelerating from 7% in the previous quarter, while billed business growth improved to 7% from 6% in the prior period. Noninterest revenues beat consensus primarily due to strong net card fees, though discount revenues were in line with expectations.
UBS highlighted that expenses missed consensus by approximately 20 cents per share, driven by higher personnel costs and cardmember rewards. Net interest income also fell short of expectations, while provisions were slightly better than anticipated, and a lower tax rate provided a 20-cent positive impact.
The firm emphasized that revenue and billed business growth metrics are particularly important for American Express stock, suggesting that the acceleration in these areas might outweigh concerns about the quality of the earnings beat.
In other recent news, American Express reported robust second-quarter earnings for 2025, surpassing analyst expectations with an earnings per share (EPS) of $4.08 against a forecast of $3.87. The company achieved record quarterly revenue of $17.9 billion, marking a 9% increase year-over-year, and reaffirmed its full-year revenue growth guidance of 8-10%. Despite these positive results, Monness, Crespi, Hardt maintained a Neutral rating for American Express, citing concerns about slowing travel expenditure trends. The firm’s analysis highlighted stagnant growth in airline spending and a slowdown in the U.S. Consumer Services segment. Additionally, goods and services spending grew at 7%, outpacing travel and entertainment at 6%. Monness established a fair value estimate of approximately $285 for American Express stock, based on 16 times calendar 2026 earnings per share. The analyst also noted that competition could continue to pressure the company’s valuation multiple, reinforcing their decision to maintain a Neutral stance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.