American Express (NYSE: AXP) has become a focal point for both investors and analysts recently. The company’s latest earnings disclosure, coupled with a subsequent decline in its stock value, has captured the interest of market observers. Jim Cramer, the host of CNBC’s “Mad Money,” has encouraged investors to contemplate acquiring American Express shares following this recent decrease.
Cramer pointed out the firm’s achievements in engaging younger clientele, especially Millennials and Gen Z, whom he believes will remain loyal to the brand for many years. While the company experienced a minor miss in revenue expectations and a reduction of its full-year projections, American Express nonetheless impressed with a notable earnings surplus. The firm’s revenue (after deducting interest expenses) increased by 8% compared to the previous year, reaching $16.64 billion, though slightly falling short of the analyst consensus of $16.67 billion.
Nevertheless, the adjusted EPS of $3.49 surpassed the analysts’ projections of $3.28. Cramer stressed the company’s robust earnings and credit quality, which he predicts will enhance further due to the Federal Reserve’s ongoing interest rate reductions.
Cramer commends AmEx’s investment prospects
He also praised American Express for its effective outreach to younger cardholders, a segment he considers to possess greater lifetime value over older demographics. CFO Christophe Le Caillec remarked during the earnings call about the strong loyalty being exhibited by Millennial and Gen Z clients. In spite of mixed outcomes, analysts observed the company’s rising loan volumes, steady growth in Card Member spending, and increasing revenue from card fees.
Earlier in October, American Express revealed that it would acquire full ownership of Swisscard from UBS Group AG. Following the earnings announcement, the company’s stock experienced a decline of more than 2%, yet Cramer contends that Wall Street is undervaluing the firm’s earnings strength and long-term growth potential. Technical assessments also indicate possible trading prospects for American Express stock.
The information showcases a variety of trading tactics based on different time horizons, including long-term, swing, and day trading strategies. As always, considering the risks and undertaking comprehensive research before making investment choices is crucial. Nonetheless, the recent downturn in American Express’s stock price, combined with its solid fundamentals, could provide an advantageous opportunity for those investors who have confidence in the company’s long-term growth trajectory.
