American Express Q1 preview: Where next for AXP stock?

When will American Express release Q1 earnings?

American Express, also known as Amex, is scheduled to publish first quarter earnings before US markets open on Friday April 22.

American Express Q1 earnings preview

Wall Street believes Amex’s revenues net of interest expense will rise over 28% year-on-year to $11.6 billion but forecasts diluted EPS will suffer its first fall in over a year and decline 12.7% to $2.39 as it comes up against extremely tough comparatives from the year before, when earnings soared over 568%.

Its largest division, the Global Consumer Services Group which is responsible for issuing a wide range of consumer cards around the world, is set to report a 17% increase in revenue to $6.2 billion but pretax profit is expected to decline almost 34% to $1.4 billion. This will be the toughest quarter of the year in terms of comparatives considering the division saw profits soar over 800% in the first quarter of 2021.

The Global Commercial Services unit that provides cards to corporations and small businesses is forecast to report a 25% year-on-year rise in revenue to $3.3 billion and post a mild 3.2% rise in pretax profit to $686.2 million.

The Global Merchant and Network Services division, which runs the company’s global payments network that processes and settles card transactions while providing a slew of services from marketing to data analytics to merchants, is expected to report a 13% rise in revenue from last year to $1.4 billion and see pretax profit increase 19% to $490.8 million.

The firm upgraded its full year 2022 outlook in the last update and said it is aiming to grow revenue by 18% to 20% and deliver EPS of $9.25 to $9.65 – down from the bumper $10.02 booked in 2021. Notably, its EPS target for this year still sits below what analysts had expected despite the upgrade.

It has also raised its quarterly dividend by 20% starting in the first quarter to $0.52 from $0.43, which has already been declared and will be paid on May 10 to those shareholders on the register on April 8.

‘Longer term, as the economy reaches a steady state, our aspiration is to achieve revenue growth in excess of 10% and EPS growth in the mid-teens,’ Amex said in its last quarterly update in January.

Where next for American Express stock?

American Express shares are showing strong signs of a reversal since rebounding from the latest leg of its downtrend over the last week.

The stock has rallied higher for four consecutive sessions and needs to break above the $194 ceiling to demonstrate it can set higher highs and higher lows. The RSI has recently moved into bullish territory to suggest the stock can find higher ground and the 50-day moving average continues to rise away from the longer-term moving averages. Notably, the 29 brokers that cover the stock believe it can climb to $201 over the next 12 months, which would mark a new all-time high.

However, average trading volumes have slumped over 9% during the past five sessions compared to the 10-day average and that is down over 27% compared to the 100-day average, implying momentum has waned as it has pushed higher over the last week. On the downside, the low of the last leg downwards at $174, broadly in-line with the 200-day sma, should be treated as the initial floor that needs to hold to avoid opening the door to sub-$172.

How to trade Amex stock

You can trade American Express shares with City Index in just four easy steps:

Open a City Index account, or log-in if you’re already a customer.
Search for ‘American Express’ in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

Or you can try out your trading strategy risk-free by signing up for our Demo Trading Account.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.