On Monday, RBC Capital Markets updated its outlook on American Express (NYSE: NYSE:AXP) shares, raising the price target to $267 from $265, while retaining an Outperform rating on the stock.
The revision comes in the wake of the company's second-quarter earnings report, which RBC described as solid due to steady revenue, well-managed expenses, and stable credit quality.
American Express recently adjusted its 2024 earnings per share (EPS) projections, factoring in the gains from Accertify this quarter. RBC acknowledged this revision but emphasized the unchanged core fundamental outlook for American Express.
According to the firm, the financial services company's long-term expectations for mid-teen EPS growth remain both attainable and sustainable, even with potential revenue slowdowns.
The company's second-quarter performance was highlighted by RBC as an indicator of its robust financial health. American Express managed to maintain consistency in its revenue streams while exercising control over its expenditures. Additionally, the firm noted that credit quality remained stable throughout the quarter, which is a positive sign for potential investors and current shareholders.
RBC's updated price target reflects a minor adjustment based on the most recent quarter's performance and the updated EPS outlook for 2024. The investment firm's continued Outperform rating suggests that they see American Express as a favorable investment, likely to outperform the market or its sector.
The firm concluded its assessment of American Express by adjusting its estimates and price target accordingly, indicating a continued confidence in the company's financial trajectory. This update from RBC Capital Markets could influence investor sentiment and market activity related to American Express shares in the near term.
InvestingPro Insights
As American Express (NYSE: AXP) garners attention with RBC Capital Markets' updated outlook, InvestingPro data and tips provide additional context for investors considering the stock. With a market capitalization of $172.31 billion and a Price/Earnings (P/E) ratio of 18.1, the company stands as a heavyweight in the consumer finance industry. Notably, American Express is trading at a low PEG ratio of 0.49 as of the last twelve months ending Q2 2024, suggesting that its stock price is modest relative to near-term earnings growth expectations.
InvestingPro Tips highlight that American Express is not only a prominent player in its industry but has also demonstrated a commitment to shareholder returns by maintaining dividend payments for 54 consecutive years. Additionally, the company's liquid assets exceed its short-term obligations, providing financial flexibility. For investors seeking further insights, InvestingPro offers additional tips on American Express, which can be accessed at https://www.investing.com/pro/AXP. There are 9 additional InvestingPro Tips available, which could further inform investment decisions.
For those looking to delve deeper into American Express's financials, the company's revenue growth stands at 9.62% for the last twelve months as of Q2 2024, with a gross profit margin of 55.83%, underscoring its efficiency in generating earnings. Investors can take advantage of a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing access to comprehensive financial analysis and exclusive market insights.
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