Opinions
Lorne Steinberg
American Express
AXP-N
TOP PICK
Mar 06, 2025
Stock price when the opinion was issued
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Premium contentAmerican Express Company (Mexico), S.A. de C.V. is a diversified global integrated travel and financial services company with operations in more than 200 countries and a presence in Mexico since 1852. It is characterized by offering superior services that exceed customer expectations in financial products, such as personal service and credit cards, corporate cards, and leisure and business travel services. American Express provides its customers with access to products, ideas, and experiences that enrich lives and contribute to business success. Social media mentions are up 1400% in the past 24h.
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.
Positioned higher on the socio-economic side than Visa or MA, so it doesn't have a lot of credit problems. Absolutely spectacular track record. Extremely profitable right through the entire financial crisis. Earnings growth at the 15% annualized level, trades at only 18x. Excess cash generation. Repurchased ~40% of stock in last 20 years. Yield is 1.17%, keeps jacking it up.
(Analysts’ price target is $324.71)Also a core holding of his good friend Warren Buffett ;)