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Opinions Jim Cramer - Mad Money
American ExpressAXPBUY ON WEAKNESSOct 21, 2024
Jim Cramer - Mad MoneyStock 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 SteinbergAXP 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
Wall Street got their quarter wrong again. It hit $286, a new high, last Thursday, but tumbled 2.19% today. Revenues were in-line at 6% in their total spending in their cards, and expenses were 9% YOY, but below estimates, and they beat EPS, but they slightly trimmed their full-year revenue growth forecast, but Millennials/GenZ spending is up 12% YOY, the Boomers are flat while GenX is 4%. Delinquencies look good, not that bad. Wall Street didn't like their gradual slowdown in revenue growth.