American Express's share price is experiencing a decline today.
Transformed Version:
Having churned out fourth-quarter earnings surpassing predictions, American Express (AXP) stumbled a tad, with its outlook falling short of investor expectations. The shares took a plunge of 3% by 10:15 a.m. ET, reflecting the disappointment.
Beyond Satisfactory, Yet Short of Expectations
American Express registered a quarterly earnings figure of $3.04 per share, marginally surpassing forecasts. The revenue figure came in at an estimated $17.18 billion, in line with analyst prospectives. The company rounded off 2024 by posting an annual earnings per share (EPS) of $14.01, marking a 25% surge from its 2023 figures.
CEO Stephen J. Squeri expressed his satisfaction in the company's performance, stating, "2024 was a mighty year for American Express." He noted an increase in billings growth to 8%, culminating from strong consumer and commercial spending during the holiday season.
However, the enthusiasm may not suffice the yearning of the investment fraternity. American Express forecasts a full-year 2025 EPS ranging between $15.00 and $15.50. The midpoint of this projection ($15.25) falls short of the $15.28 per share that analysts had anticipated prior to the earnings release.
Is American Express a purchase worthwhile?
Gaining 70% in the span of a year, American Express shares appeared to demonstrate a robust showing. The earnings report, however, may necessitate a tempering of near-term excitement.
For long-strategists, there remains appeal. American Express has announced a 17% increase in its quarterly dividend, elevating a dividend yield that had dipped under 1%. The company further promised to maintain a mid-teen percentage of annual earnings-per-share growth for the long term.
Investors may witness potential volatility, yet any unfavorable slide could yield acquisition opportunities.
Enrichment Data Integration:
- Analyst Expectations for Full-Year 2025: American Express is aiming for revenue growth of 8% to 10% in 2025.[1][2] Moreover, the company has set its targets for EPS between $15.00 and $15.50 for the aforementioned year.[1][2]
These projections represent the company's undeterred progress in the premium card services sector and its confidence in sustaining momentum.
Given the company's EPS forecast for 2025 falling short of analyst expectations, some investors might choose to reconsider their investing strategy in American Express, as they finely tune their finance portfolios and consider the potential impact on their money. Furthermore, with the company announcing a dividend increase and maintaining a long-term growth target, potential investors may see this as an opportunity to invest, recognizing the inherent risk and volatility associated with the finance sector.
