American Express Company ($AXP) Earnings (Q3 FY22)

 American Express Company ($AXP) Earnings and Opinion:


American Express is a company in the Financial Services sector and operates in the Credit Services industry. The company provides charge and credit payment card products, and travel-related services worldwide. American Express was founded in 1850 and is currently headquartered in New York, New York. The company made its debut on the NYSE in 1977.

American Express Financial Results:

  • Revenue of $13.56B beating expectations of $13.49B
  • Total Operating expenses of $10.32B missing expectations of $10.49B
  • Adj Diluted EPS of $2.47 beating expectations of $2.40
Opinion:
American Express saw some negative sentiment, right when the earnings report was released. However, the sentiment turned around throughout the day on Friday. The company reported earnings before the market opened on Friday morning. American Express saw record revenues for this quarter. The revenue grew 24% on a year-over-year basis. Consumers were more out and about this quarter, with a lot of spending coming in on shopping and traveling. However, the CFO had some negative things to claim. They think the rising interest rates may cause some challenges to the Net Interest Income (NII) over time. This could be backed by the fact that companies are reporting such high values in this metric. A lot of sentiment is relying on this metric, and when rates start to cool down a bit, that is when the companies may see some headwinds. Overall, it was a pretty mediocre quarter. The revenues were nice, and they were able to have expenses come in lower than the expected. The valuation seems to be a little overvalued. The Dividend yield comes in lower than their competitors. The ROE is right in line with the 35.13% median. PEG ratio is a little high at 1.36, compared to the median of 0.26. In my opinion, American Express may be a stock to avoid. They look to be doing better with consumer spending rising. However, the CFO comments spooks me a little bit. The headwinds could come true with the increase in rates. However, this may not have that much of a dramatic effect as many will think. The company lacks a little bit, in comparison with its competitors. That is one think that leads me to think their are better option. I am going to sit on this one. 


*Information from Bloomberg and Yahoo Finance

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