Yahoo Finance Will American Express Company’s (NYSE:AXP) Earnings Grow In The Year Ahead?
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As American Express Company (NYSE:AXP) released its earnings announcement on 31 December 2018, analyst consensus outlook appear cautiously optimistic, with profits predicted to increase by 0.4% next year against the past 5-year average growth rate of -7.4%. By 2020, we can expect American Express’s bottom line to reach US$6.8b, a jump from the current trailing-twelve-month of US$6.8b. Below is a brief commentary around American Express’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
Check out our latest analysis for American Express
How is American Express going to perform in the near future?
The view from 24 analysts over the next three years is one of positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To get an idea of the overall earnings growth trend for AXP, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
By 2022, AXP’s earnings should reach US$7.5b, from current levels of US$6.8b, resulting in an annual growth rate of 3.2%. This leads to an EPS of $9.81 in the final year of projections relative to the current EPS of $7.93. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 18% to 15% by the end of 2022.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For American Express, I’ve put together three essential aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is American Express worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether American Express is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of American Express? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
