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Opinions Christine Poole
American ExpressAXPCOMMENTApr 01, 2014
Stock price when the opinion was issued
As of Jun 15, 2026. Market Open.
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Different from MA and V. Fallen because of AI fears. Years of data on both customers and merchants, whereas Visa doesn't really have that. Should greatly benefit from AI. Reasonable valuation.
He bought some more this morning. Yield is 1.08%.
John O'Connell, CFA
Double-digit earnings growth year after year. Last quarter was strong again. Stock remains cheap.
Lorne Steinberg
AXP is a smaller name (roughly half the size of V), but its sales have grown similar to V over the past year, and AXP still trades at a slight discount to V. Both are expecting similar levels of forward sales and earnings growth over the next few years, but AXP is expecting to see slightly higher earnings growth rates. AXP's outperformance has been driven by strong cardholder spend growth and rising fee/interest income, but its business model can be more sensitive to economic cycles, credit risk, and consumer behavior shifts than V. Overall, we think both are solid options, but due to its positive momentum, strong fundamentals, and slightly cheaper valuation, we would give AXP the slight edge today.
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Last Friday they reported a strong quarter, but shares still fell 2.3% and 1.6% today. They reported 7% billed business growth better than expected; revenues also beta. They reiterated 8-10% revenue growth and 12-16% EPS growth, full year. But they said that there was softer spending in airlines and lodging which spook investors. But AXP's delinquency rates are far below the industry average, Gen Z spending was +39% YOY while Millennial spending was +10%, and they added 3.1 million cards in Q2, 63% of which were Millennials or Gen Z.
Earnings and revenues beat, with a 20% jump in card fees. Their customers are high-end consumes who are still doing well (consumers are bifurcated, either doing well or struggling). Their delinquency rate is a superb 1.3%. Trades at only 18x earnings, with 14% earnings growth ahead.
He bought more $282. They target a young, aspirational person trying to get a gold card. Likes it.
Kevin Simpson
Visa (V-N) or American Express (AXP-N)? At present she does not hold a credit card company, but it is a group that she is looking at because they have all pulled back close to their 50 day moving average. Visa and MasterCard trade at a much higher multiple (25X forward earnings) but growth rates are arguably stronger than American Express. Between this and Visa she would probably prefer Visa because it is a larger, more dominant player.