American Express (AXP, Financial) saw a decline of 2.72% in its stock price following the release of its fourth-quarter earnings. Although earnings per share for the quarter slightly exceeded expectations, concerns arose from its 2025 earnings guidance, which fell short of analysts’ consensus.
For the quarter, American Express reported earnings of $3.04 per share, edging past market expectations, while revenue was consistent with the consensus estimate of $17.18 billion. On a yearly basis, the company posted earnings of $14.01 per share, reflecting a substantial 25% increase from 2023.
The company forecasts its full-year 2025 earnings to range between $15 and $15.50 per share. The midpoint of this guidance, $15.25, slightly undercuts the analysts' consensus estimate of $15.28 per share, which contributed to the negative sentiment in the stock market.
Currently, the stock is priced at $316.995, trading near a 10-year high, and exhibiting a price-to-earnings (P/E) ratio of 23.33. This valuation raises concerns about the company's future growth prospects. Additionally, the GF Value indicates that the stock is "Significantly Overvalued," with a GF Value of $240.34, suggesting potential overpricing relative to its intrinsic value.
Despite the high valuation, American Express displays financial health with a Piotroski F-Score of 7, indicating strong financial strength, and a Beneish M-Score of -2.49, suggesting it is unlikely to be a financial manipulator. The company's revenue per share shows consistent growth, supporting its robust business model.
Investors should also consider that the stock has experienced significant insider selling, with four transactions totaling 191,043 shares sold in the past three months, reflecting possible concerns from company insiders about future performance.
Overall, while American Express (AXP, Financial) continues to perform well operationally, the current stock price suggests caution for investors considering its high valuation and potential for limited upside based on its GF Value indication.
