Barclays reiterated an Equalweight rating on American Express (NYSE:AXP) on Friday with a stable price target of $221.00. The company highlighted the company’s revenue growth potential of 10% in fiscal 2024, noting that this increase will likely depend on a significant contribution from net interest income (NII). The assessment also noted that while American Express’ current valuation reflects its solid growth prospects, its focus on lending may limit further expansion of its price-to-earnings ratio.
Barclays pointed out that American Express has several chances to achieve its expected revenue growth. The company’s analysis suggests that to meet revenue goals, American Express should place more emphasis on NII, or the difference between revenue generated by a bank’s assets and expenses associated with paying off liabilities.
The company’s commentary acknowledged American Express’ current market valuation, indicating that growth potential has been factored into the stock’s current price. However, it was also mentioned that as American Express moves more into the lending business, this strategic move could be a limiting factor for the stock’s potential price-to-earnings multiple growth.
The Equalweight rating indicates that Barclays considers American Express shares equally valued at current levels, suggesting the stock is expected to perform in line with the broader stock market or its sector peers.
The $221.00 price target remains unchanged and serves as an indicator of where Barclays believes the stock will trade in the near future. The target is based on the analysis of the company’s earnings potential and other relevant market factors.
In other recent news, American Express has found itself navigating a complex financial landscape. Wells Fargo maintained an Overweight rating on American Express, citing the stock’s current valuation as an opportunity for investors. The financial services firm suggests that American Express shares are trading at an attractive multiple: 15 times estimated earnings per share (EPS) for 2025 and 13 times expected EPS for 2026. Citi has initiated coverage on American Express with a Neutral rating, setting a price target of $250.00 per share, suggesting lower revenue projections offset by reduced expenses. BTIG also initiated coverage on the company with a Neutral rating, expressing potential challenges to consumer spending levels.
However, American Express has been recognized for its successful growth of new accounts in both the Consumer and Commercial sectors. Russian President Vladimir Putin has authorized American Express to voluntarily close its operations in Russia, marking a shift in international trade relations amid geopolitical tensions. Meanwhile, Keefe, Bruyette & Woods maintained its Outperform rating on American Express, indicating potential upside for the company’s stock. These are the recent developments in the financial industry regarding American Express.
Insights from InvestingPro
As American Express (NYSE:AXP) moves through its strategies to drive revenue growth, particularly through net interest income (NII), it’s enlightening to look at the company’s performance through the lens of current financial metrics. With a solid market capitalization of $161.58 billion, American Express trades at a price-to-earnings (P/E) ratio of 18.41, which moves to a slightly more attractive 17.81 when considering the trailing twelve months starting in Q1 2024. This P/E ratio positions the company attractively for near-term earnings growth.
A tip from InvestingPro points out that American Express trades at a low P/E ratio relative to near-term earnings growth, which could be of interest to value-oriented investors. Furthermore, the company’s PEG ratio of 0.65 for the same period suggests that the stock may be undervalued when considering its earnings growth rate. With revenue growth of 9.33% in the trailing twelve months as of 1Q 2024, American Express is on a trajectory that aligns with Barclays’ expectations for the fiscal year.
For investors looking to delve deeper into American Express’ financial health and future prospects, there are additional tips from InvestingPro. These tips include insights into the company’s status as a major player in the consumer financing industry and its impressive record of maintaining a dividend for 54 consecutive years. To delve deeper into these insights, use the coupon code PRONEWS24 to get an additional 10% off a one-year or two-year Pro and Pro+ subscription to InvestingPro, which offers an extensive list of 8 additional tips for American Express.
This article was generated and translated with the support of artificial intelligence and reviewed by an editor. For further information, please see our T&Cs.
