Wall Street analysts raised their price targets on American Express Co (NYSE:AXP) on Monday after the company released its quarterly print Friday amid an exciting earnings season.
American Express reported fourth-quarter revenue (net of interest expense) growth of 9% to $17.18 billion, topping the analyst estimate of $17.16 billion. The increase reflected strong Card Member spending, higher net interest income, and accelerated card fee growth.
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GAAP EPS came in at $3.04. Amex expects revenue of $71.22 billion-$72.54 billion compared to a consensus of $71.28 billion. It expects EPS of $15.00–$15.50 versus the consensus of $15.23.
Morgan Stanley analyst Betsy Graseck maintained American Express with an Equal-Weight and raised the price target from $305 to $310.
Keefe, Bruyette & Woods analyst Sanjay Sakhrani reiterated American Express with an Outperform and raised the price target from $350 to $360.
Morgan Stanley: Card spending exits 2024 on the upswing, supported by T&E strength, Gen Y/Z, and holiday spending. The new 2025 guide for top-line growth of 8%-10% was about in line with investor expectations but improves Graseck’s forecast to +8.7%, which could move higher if recent fourth-quarter spending momentum continues.
Graseck increased his 2025 and 2026 EPS by 1% to $15.25 and $17.60 on the back of more substantial revenues, driving modestly higher operating leverage and improved credit expectations. Even as NII was a modest miss versus consensus expectations, the analyst took his NII growth estimate up from +6.3% to +9.5% in 2025.
Graseck was looking for more of a decline in NIM as interest rates stepped lower. Still, American Express has succeeded in adding new revolvers, which should drive more NIM stability from here. This takes Graseck’s 2025 revenue growth up modestly to +8.7% (versus the prior estimate of +8.5%), still slightly below the new guidance midpoint, as Graseck would like to see further evidence of the fourth quarter of 2024 spending momentum continuing.
Keefe, Bruyette & Woods: American Express reported EPS of $3.04, compared to Sakhrani’s $3.02 and consensus $3.03. Upside relative to the analyst’s estimates was driven by lower provisions for losses (+$0.44), lower effective tax rate (+$0.03), and higher revenues net of interest expenses (+$0.03), partially offset by higher expenses (-$0.48).
American Express reported a good quarter that slightly beat Sakhrani’s and consensus expectations. However, with accelerating spending trends, the analyst noted the expectations were for more on the guidance versus the 8%-10% revenue guidance provided.
Still, Sakhrani noted the fundamental spending trends are encouraging, with total billed business growth (on a foreign-exchange adjusted basis) accelerating by two ppt sequentially with an upswing across US Consumers, Commercial Services, and International Card. Sakhrani expects the stock to be weaker, given the high expectations heading into the results.
Price Action: AXP stock is down 1.53% at $316.42 at the last check on Monday.
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