American Express (AXP) Cut to Sell at Zacks Investment Research

Zacks Investment Research cut shares of American Express (NYSE:AXP) from a hold rating to a sell rating in a report published on Thursday, September 20th.

According to Zacks, “American Express is faced with an increase in reward expense led by enhancements to its U.S. platinum products. Also, cost of card member services has been increasing over the past three years and continues to do so this year, reflecting higher engagement levels across its premium travel services. Increase in marketing expense will also push up operating expense. It is also witnessing an increase in provision of loan losses for the past two and half years. Given continued strong growth in the loan portfolio and a higher lending write-off rate, a continued increase in provisions will dent the company’s cash and cash equivalents. However, it continues to witness strong loan growth and credit metrics. A solid market position, strength in card business and significant opportunities from the secular shift toward electronic payments are growth drivers. Its shares have outperformed the industry's growth year to date.”

AXP has been the topic of several other research reports. Stephens raised shares of American Express from an equal weight rating to an overweight rating and set a $110.50 target price on the stock in a report on Monday, September 17th. Oppenheimer set a $113.00 target price on shares of American Express and gave the company a buy rating in a report on Wednesday, July 18th. Jefferies Financial Group reaffirmed a hold rating and issued a $105.00 target price on shares of American Express in a report on Monday, July 16th. Buckingham Research raised shares of American Express from a neutral rating to a buy rating and raised their target price for the company from $111.00 to $112.00 in a report on Friday, June 29th. Finally, UBS Group raised shares of American Express from a hold rating to a buy rating in a report on Friday, July 20th. One analyst has rated the stock with a sell rating, ten have given a hold rating and sixteen have assigned a buy rating to the company. American Express presently has an average rating of Buy and an average price target of $109.98.

Shares of AXP traded up $1.42 during mid-day trading on Thursday, hitting $103.00. 4,852,793 shares of the company’s stock were exchanged, compared to its average volume of 3,543,294. The stock has a market capitalization of $91.69 billion, a PE ratio of 17.55, a P/E/G ratio of 1.47 and a beta of 1.16. American Express has a fifty-two week low of $87.54 and a fifty-two week high of $111.77. The company has a debt-to-equity ratio of 2.67, a quick ratio of 1.92 and a current ratio of 1.92.

American Express (NYSE:AXP) last issued its quarterly earnings results on Wednesday, July 18th. The payment services company reported $1.84 earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of $1.83 by $0.01. The business had revenue of $10 billion for the quarter, compared to analysts’ expectations of $10.05 billion. American Express had a net margin of 9.23% and a return on equity of 30.08%. The business’s quarterly revenue was up 9.0% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.47 earnings per share. On average, sell-side analysts predict that American Express will post 7.24 earnings per share for the current year.

The firm also recently announced a quarterly dividend, which will be paid on Friday, November 9th. Stockholders of record on Friday, October 5th will be given a dividend of $0.39 per share. The ex-dividend date is Thursday, October 4th. This is a positive change from American Express’s previous quarterly dividend of $0.35. This represents a $1.56 dividend on an annualized basis and a dividend yield of 1.51%. American Express’s dividend payout ratio (DPR) is 26.58%.

American Express declared that its Board of Directors has initiated a share repurchase program on Thursday, June 28th that allows the company to buyback $3.40 billion in outstanding shares. This buyback authorization allows the payment services company to purchase up to 4.1% of its stock through open market purchases. Stock buyback programs are usually an indication that the company’s management believes its stock is undervalued.

In other American Express news, major shareholder Ventures Fund Vii L.P. Vivo bought 20,142,123 shares of the stock in a transaction dated Thursday, August 30th. The shares were acquired at an average cost of $0.17 per share, for a total transaction of $3,424,160.91. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Stephen J. Squeri sold 12,500 shares of the firm’s stock in a transaction that occurred on Wednesday, August 1st. The stock was sold at an average price of $99.73, for a total transaction of $1,246,625.00. Following the transaction, the chief executive officer now owns 191,971 shares in the company, valued at $19,145,267.83. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 47,448 shares of company stock worth $4,942,168. Insiders own 0.20% of the company’s stock.

Hedge funds and other institutional investors have recently modified their holdings of the stock. Willis Investment Counsel lifted its position in American Express by 0.7% during the 1st quarter. Willis Investment Counsel now owns 72,760 shares of the payment services company’s stock worth $6,787,000 after acquiring an additional 495 shares in the last quarter. Titus Wealth Management lifted its position in American Express by 22.5% during the 2nd quarter. Titus Wealth Management now owns 2,722 shares of the payment services company’s stock worth $267,000 after acquiring an additional 500 shares in the last quarter. Parallel Advisors LLC lifted its position in American Express by 5.8% during the 2nd quarter. Parallel Advisors LLC now owns 9,441 shares of the payment services company’s stock worth $925,000 after acquiring an additional 516 shares in the last quarter. Institutional & Family Asset Management LLC lifted its position in American Express by 8.8% during the 1st quarter. Institutional & Family Asset Management LLC now owns 6,485 shares of the payment services company’s stock worth $605,000 after acquiring an additional 524 shares in the last quarter. Finally, Nvwm LLC lifted its position in American Express by 7.9% during the 1st quarter. Nvwm LLC now owns 7,189 shares of the payment services company’s stock worth $655,000 after acquiring an additional 525 shares in the last quarter. 82.85% of the stock is owned by hedge funds and other institutional investors.

American Express Company Profile

American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. It operates through four segments: U.S. Consumer Services, International Consumer and Network Services, Global Commercial Services, and Global Merchant Services.

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