Truist has adjusted its price target for American Express (AXP, Financial), raising it to $340 from a previous $335, while maintaining a Buy rating. This adjustment is part of a larger analysis ahead of the upcoming second-quarter results for U.S. banks. Concerns over a potential recession had caused a significant sell-off prior to the last quarter's results, though this has largely been reflected in stock multiples alongside a subsequent recovery.
The firm notes that American Express has shown resilience with monthly data remaining stable. Furthermore, a mid-quarter presentation from the company highlighted strong performance among its Gen Z and Millennial clients, who are exceeding industry averages. This positive outlook underpins Truist's confidence in American Express's growth potential.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 26 analysts, the average target price for American Express Co (AXP, Financial) is $303.10 with a high estimate of $371.00 and a low estimate of $240.00. The average target implies an downside of 5.27% from the current price of $319.95. More detailed estimate data can be found on the American Express Co (AXP) Forecast page.
Based on the consensus recommendation from 31 brokerage firms, American Express Co's (AXP, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for American Express Co (AXP, Financial) in one year is $271.96, suggesting a downside of 15% from the current price of $319.95. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the American Express Co (AXP) Summary page.
AXP Key Business Developments
Release Date: April 17, 2025
- Revenue: $17 billion, up 8% year over year on an FX adjusted basis, or 9% excluding leap year impact.
- Net Income: $2.6 billion or $3.64 per share.
- Total Card Member Spending Growth: 6% in the quarter, or 7% excluding leap year impact.
- New Cards Added: 3.4 million in the quarter.
- Card Fee Growth: Up 20% on an FX adjusted basis.
- Total Billed Business Growth: 7.5% year over year.
- International Card Services Spend Growth: 14% year over year.
- Loans and Card Member Receivables Growth: 7% year over year on an FX adjusted basis.
- Net Interest Income Growth: 11% on an FX adjusted basis.
- Rewards Expense Growth: 16% year over year.
- CET1 Ratio: 10.7%, within the 10% to 11% target range.
- Capital Returned to Shareholders: $1.3 billion, including $0.6 billion in dividends and $0.7 billion in share repurchases.
- Return on Equity (ROE): 34% in the quarter.
- 2025 Revenue Growth Guidance: 8% to 10%.
- 2025 EPS Guidance: $15 to $15.50.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- American Express Co (AXP, Financial) reported strong revenue growth of 8% year over year on an FX-adjusted basis, or 9% excluding the leap year impact.
- The company added 3.4 million new cards in the quarter, with Millennials and Gen-Z consumers making up over 60% of new consumer accounts acquired globally.
- Card fee growth was up 20% on an FX-adjusted basis, marking the 27th consecutive quarter of double-digit card fee growth.
- Net interest income increased by 11% on an FX-adjusted basis, growing slightly faster than loans and receivables.
- American Express Co (AXP) maintained a strong credit performance, with delinquency and write-off rates below pre-pandemic levels and flat compared to the prior year.
Negative Points
- There was a sequential slowdown in airline spending growth, although spending on front of cabin tickets remained strong.
- The macroeconomic environment has increased uncertainty, with a peak weighted average unemployment rate of around 5.7% incorporated into the company's guidance.
- Commercial services spend was up only 3% versus last year, consistent with the trends seen in 2024, indicating modest growth in this segment.
- The strengthening of the US dollar continues to be a headwind to reported revenue growth, although less than anticipated earlier in the quarter.
- Rewards expense grew 16% year over year, driven by changes to the URR model and small program changes, which could impact short-term profitability.
