Fact based stock research
American Express (NYSE:AXP)

US0258161092

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

American Express stock research in summary

americanexpress.com

ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), American Express (Consumer Finance, USA) shares have lower financial characteristics compared with similar stocks. Shares of American Express are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives) and show below-average growth (Growth Rank of 45) but are safely financed (Safety Rank of 53), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on American Express's financial characteristics. As the company American Express's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 15) and low growth (Obermatt Growth Rank of 45), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 53) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	15
Growth Rank	45
Safety Rank	53
Combined Rank	23

Country	USA
Industry	Consumer Finance
Index	Dow Jones, Diversity USA, Renewables Users, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: American Express

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	23	26	15
GROWTH
GROWTH	81	79	69	45
SAFETY
SAFETY	97	59	50	53
SENTIMENT
SENTIMENT	n/a	81	88	^new
360° VIEW
360° VIEW	n/a	85	74	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better American Express is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	24	23	26	15
GROWTH
GROWTH	81	79	69	45
SAFETY
SAFETY	97	59	50	53
COMBINED
COMBINED	85	57	45	23

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of American Express the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), American Express shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for American Express. Price-to-Sales is 33 which means that the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning American Express's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 10, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of American Express. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 26 and Dividend Yield, which is lower than 57% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a sell recommendation based on American Express's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for American Express? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as American Express? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. American Express may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	26	48	55	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32	19	34	26
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	14	13	10	10
DIVIDEND YIELD
DIVIDEND YIELD	55	51	49	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	24	23	26	15

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of American Express; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), American Express shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for American Express. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 55, and Stock Returns, with a rank of 83, are also above average. But Capital Growth only has a rank of 8, which means that, currently, professionals expect the company to grow its invested capital less than 92% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	81	75	57	51
PROFIT GROWTH
PROFIT GROWTH	60	85	63	55
CAPITAL GROWTH
CAPITAL GROWTH	n/a	6	77	8
STOCK RETURNS
STOCK RETURNS	54	69	51	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	81	79	69	45

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of American Express.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company American Express has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of American Express is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for American Express and the other two below average. Refinancing is at 83, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 83% of its competitors. But Leverage is high with a rank of 15, meaning the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. Liquidity is also on the riskier side with a rank of 30, meaning the company generates less profit to service its debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), American Express has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for American Express are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with American Express and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	86	21	10	15
REFINANCING
REFINANCING	81	75	79	83
LIQUIDITY
LIQUIDITY	69	30	42	30
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	97	59	50	53

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of American Express and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	40	58	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	69	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	37	65	^new
MARKET PULSE
MARKET PULSE	n/a	86	73	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	81	88	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for American Express.
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