American Express Co (NYSE:AXP), a $213.2 billion market cap financial giant, disclosed its U.S. Consumer and Small Business Card Member loan delinquency and write-off statistics for the recent three months in a regulatory filing today. The data, provided in an 8-K filing with the Securities and Exchange Commission, offers insight into the credit performance of the company's lending portfolios.
With a strong financial health score and liquid assets exceeding short-term obligations, according to InvestingPro analysis, the company maintains a robust position in the consumer finance sector.
As of November 30, 2024, American Express reported total U.S. Consumer Card Member loans at $89.3 billion, with loans that are 30 days past due representing 1.4% of the total, consistent with the previous two months. The net write-off rate for principal only was 2.0% in November, compared to 2.4% in October and 1.9% in September.
For U.S. Small Business Card Member loans, the total as of November 30 was $30.7 billion. The proportion of these loans that were 30 days past due also remained steady at 1.5% over the three-month period. The net write-off rate for principal was 2.3% in November, slightly higher than the 2.2% in October and 2.1% in September.
The combined total for U.S. Consumer and Small Business Card Member loans reached $120.0 billion as of the end of November. The company noted that the characteristics of the loans securitized through the American Express Credit Account Master Trust may differ from those of the total loan portfolios, which include both securitized and non-securitized loans.
This loan portfolio represents a significant portion of AXP's operations, which generated $59.24 billion in revenue over the last twelve months with an impressive 55.7% gross profit margin. InvestingPro subscribers can access detailed analysis of AXP's financial metrics and 13 additional exclusive ProTips about the company's performance.
Furthermore, the filing provided information on the credit performance of the Lending Trust for the same period. As of November 30, the ending total principal balance was $25.9 billion, with a net annualized default rate, after recoveries, of 1.3%. The total 30+ days delinquent was reported as $0.2 billion.
The disclosure of these statistics is part of American Express's commitment to transparency regarding its credit performance. The company's filing also indicates that the reported credit performance may vary month-to-month due to factors such as loan mix, aging, and calculation methods used.
Investors and analysts may find this information useful for assessing the company's financial health and risk management practices. The data is based on a press release statement from American Express Company (NYSE:AXP).
For a comprehensive understanding of AXP's valuation and future prospects, InvestingPro offers a detailed Pro Research Report, part of its coverage of over 1,400 US equities, providing essential insights for informed investment decisions.
In other recent news, American Express reported strong third-quarter earnings, surpassing expectations with earnings per share (EPS) of $3.49 and revenues totaling $16.6 billion, marking an 8% increase year-over-year. The company also raised its full-year EPS guidance to between $13.75 and $14.05.
Additionally, American Express underwent a notable business transaction, acquiring full ownership of Swisscard from UBS. This move followed UBS's divestiture of its 50% stake in the joint venture.
In terms of credit performance, American Express disclosed its latest metrics for its U.S. Consumer and U.S. Small Business Card Member lending portfolios. The U.S. Consumer Card Member loans stood at $88 billion as of October 31, 2024, with a delinquency rate of 1.4% for loans 30 days past due. The net write-off rate for principal only was 2.4% in October.
Analysts' opinions on American Express have been varied. TD Cowen maintained a hold rating on the company's shares, raising the price target to $268 from $260. On the other hand, Baird increased its price target for American Express to $240 from $215, while maintaining an underperform rating. Meanwhile, BTIG reiterated its sell rating on American Express, maintaining a $230 price target.
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