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On Monday, RBC Capital Markets showed confidence in American Express Company (NYSE:AXP) by increasing its price target from $330.00 to $350.00 while reiterating an Outperform rating on the stock. The adjustment follows the company’s recent fourth-quarter earnings report, which RBC Capital analyzed, highlighting several key performance indicators.
The analysis by RBC Capital noted that American Express displayed solid core results, with revenue growing 9.3% year-over-year to $60.76 billion, driving positive trends in spending activity. This was set against a backdrop of higher expenses, which were deemed acceptable by the analysts. Credit quality was described as very stable, with provisions coming in modestly lower than anticipated. InvestingPro subscribers can access 13 additional key insights about AXP's financial performance and market position through exclusive ProTips.
American Express’s outlook for 2025 was also a subject of optimism. RBC Capital pointed out the forecast for a consistent pace of revenue growth. More significantly, the earnings per share (EPS) guidance suggested that American Express is expected to continue its long-standing trajectory of mid-teens EPS growth. This growth is viewed as sustainable by RBC Capital, even in potentially slower revenue conditions.
The analyst from RBC Capital provided a statement summarizing their position: "Revenue acceleration a positive. Favorable outlook with consistent EPS growth; We are recapping 4Q results. Core results were solid with stronger revenue and spend activity driving trends, balanced against higher but acceptable expense growth. Credit continues to be very stable, and the provision was modestly lower than expected. The 2025 outlook calls for a consistent pace of revenue growth, and importantly, the EPS guidance indicated that the company should maintain its longstanding mid-teens EPS growth trajectory. We continue to see this EPS growth as very durable, even in a slower revenue environment. Adjusting estimates and price target."
The raised price target and maintained Outperform rating reflect RBC Capital’s positive view on American Express's future performance, taking into account the company’s recent financial results and its strategic outlook for the coming years.
In other recent news, American Express has seen a flurry of analyst revisions. Keefe, Bruyette & Woods raised their price target to $360, reflecting the company's strong fourth-quarter 2024 performance and a positive start to 2025. On the other hand, Compass Point downgraded the target to $309 due to concerns over revenue growth. BTIG raised its price target to $272, maintaining a Sell rating due to concerns about the company's expenses. Evercore ISI increased the company's stock target to $344, citing higher sector multiples and positive revisions to earnings per share (EPS) for 2025 and 2026.
The company reported solid earnings for the fourth quarter of 2024 with an EPS of $3.04, slightly surpassing the consensus estimate of $3.03. The company's 9.3% revenue growth in the last twelve months reached $60.76 billion. These are recent developments in the financial analysis of American Express.
Analysts from Goldman Sachs reaffirmed a Buy rating on American Express shares with a steady price target of $350, despite pre-tax pre-provision net revenue falling short of expectations due to higher expenses. Wolfe Research maintained a Peerperform rating on American Express, noting that the company's fourth-quarter EPS matched estimates and exceeded their expectations. These revisions and ratings come from recent analyst notes and reflect the ongoing financial developments within American Express.
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