American Express surges 12.0% despite weak earnings

6:05 PM January 27, 2023

American Express (AXP.US) stock surged over 12.0% on Friday as optimistic guidance for 2023  and dividend increase overshadowed  weak Q4 results.  

  • Credit card company earned $2.09 per share, down 4.1% YoY, and well below analysts estimates of $2.22 per share. 
  • Revenue rose 17% to $14.2 billion, essentially in line with market projections of $14.22 billion, mainly thanks to record card member spending.
  • The company plans to increase its dividend by 15% to 60 cents per share in Q1 2023.

Highlights of American Express quarterly report. Card members loans has risen sharply, indicating a potential decline in the savings of average Americans, while spending remains high. Source: Alpha Street

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  • "Our performance to date and the opportunities ahead position us well to deliver on our longer-term growth plan for double-digit annual revenue growth and mid-teens EPS growth," said CEO Stephen Squeri. 
  • "We have significantly grown the company’s revenue base by investing in our value propositions, increasing our generational relevance, growing merchant acceptance, introducing new digital capabilities, and enhancing our Membership Model with new lifestyle offerings and financial services" said Squeri. 
  • "This has led to sustained growth in customer acquisitions – which reached a record 12.5 million new Card accounts in 2022 – along with high levels of engagement and retention, which has enabled us to build scale while driving momentum across our core businesses," he added. 
  • Company expects net revenue growth in the region between 15% and 17% i 2023 and EPS of $11 to $11.40, which topped Refinitiv analysts average estimates of $10.55 per share.

American Express (AXP.US) stock launched today's session with a bullish price gap and later ion buyers managed to break above major resistance at $168.25, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in March 2020. If buyers manage to uphold current momentum, then nearest resistance to watch is the all-time high around $200.00. Source: xStation5


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