Opinions
Jim Cramer - Mad Money
American Express
AXP-N
BUY ON WEAKNESS
Oct 21, 2024
Stock price when the opinion was issued
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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.
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.
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.