American Express Co. (NYSE:AXP) disclosed its latest U.S. Consumer and Small Business Card Member loan statistics on Thursday, revealing stable delinquency rates and a slight decrease in net write-off rates.
According to the data filed with the SEC, as of July 31, 2024, American Express's U.S. Consumer Card Member loans stood at $85.9 billion, with a 30-day past due rate holding steady at 1.3% over the past three months. The net write-off rate for principal only showed a marginal improvement, decreasing from 2.4% in May to 2.1% in July.
The U.S. Small Business Card Member loans exhibited a similar pattern, totaling $29.2 billion as of July 31. The 30-day past due rate for these loans also remained constant at 1.4% from May to July. Meanwhile, the net write-off rate for principal only decreased slightly from 2.5% in May to 2.3% in July.
The total loans for both U.S. Consumer and Small Business Card Members combined reached $115.1 billion. The statistics provided by American Express also include additional data to the monthly Form 10-D report filed by the American Express Credit Account Master Trust (Lending Trust), which contains both securitized and non-securitized loans.
The Lending Trust's credit performance data for the three most recent monthly reporting periods showed an ending total principal balance of $25.8 billion for each month. The annualized default rate net of recoveries was reported at 1.2% for July, with a slight uptick in June at 1.5% and 1.4% in May. Total delinquencies over 30 days were consistent at $0.2 billion.
This financial disclosure, required under Regulation FD, offers investors insight into the credit quality and risk management of American Express's lending portfolios. The information is based on a press release statement and reflects the company's performance as of July 31, 2024.
In other recent news, American Express reported a significant 44% year-over-year earnings growth in the second quarter, setting a record high in revenue. The company has adjusted its full-year earnings per share (EPS) guidance to $13.30 - $13.80, reflecting the solid performance of its core business.
Moreover, American Express has issued $3.4 billion in new debt securities, a strategic move expected to be used for general corporate purposes.
In other developments, the Central Bank of Russia revoked the banking license of the Russian subsidiary of American Express, following the subsidiary's request for voluntary liquidation. This marks the end of American Express's direct banking presence in Russia.
On the analyst front, BMO Capital maintained its underperform rating on American Express shares, despite adjusting its near-term earnings forecasts upwards due to lower-than-expected expenses.
In contrast, RBC Capital Markets retained an Outperform rating and increased the share price target to $267, acknowledging the company's steady revenue and well-managed expenses.
InvestingPro Insights
As American Express Co. (NYSE:AXP) showcases stable delinquency rates and improved net write-off rates in its latest U.S. Consumer and Small Business Card Member loan statistics, a closer look at the company's financial metrics provides a broader understanding of its performance. According to real-time data from InvestingPro, American Express has a market capitalization of $174.99 billion, underlining its significant presence in the consumer finance industry. The company's Price/Earnings (P/E) ratio stands at 18.38, which, when compared to its near-term earnings growth, indicates that the stock is trading at a low P/E ratio. This is a key point for investors looking for value investment opportunities.
With a revenue growth of 9.62% over the last twelve months as of Q2 2024, American Express is not only maintaining its profitability but also showing a robust upward trajectory. The company's strong return over the last year, with a 52.58% one-year price total return, further cements its status as a solid performer in the market. Additionally, American Express has continued its commitment to shareholders by maintaining dividend payments for 54 consecutive years, a testament to its financial stability and reliability.
InvestingPro Tips highlight that American Express is predicted to remain profitable this year and has been profitable over the last twelve months. With more than 11 analysts having revised their earnings downwards for the upcoming period, it's crucial for investors to consider these expert insights. For those interested in further analysis and tips, InvestingPro offers additional insights on American Express, which can be accessed for a deeper dive into the company's prospects.
For investors and analysts keeping a close eye on American Express, these insights and data points offer valuable context to the company's recent financial disclosures and future potential. With a total of 9 additional InvestingPro Tips available, individuals can explore a more comprehensive investment analysis at InvestingPro.
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