Buy the Surge in American Express Stock (AXP) as Q4 Earnings Approach?

Quarterly results from several of the major credit card companies will be a highlight of this week’s earnings lineup with a spotlight on American Express AXP in particular.Hitting fresh 52-week highs of $319 a share on Tuesday, AXP has soared over +70% in the last year. This has impressively outperformed the broader indexes and many of its credit card peers including Capital One’s COF +49% and Mastercard’s MA +20%.That said, let’s see if the surge in American Express stock can continue as its Q4 earnings approach on Friday, January 24.Image Source: Zacks Investment Research American Express Q4 ExpectationsAmerican Express’s Q4 sales are expected to come in at $17.18 billion, a 9% increase from $15.8 billion in the comparative quarter. On the bottom line, Q4 EPS is thought to have spiked 15% to $3.03 versus $2.62 per share a year ago.Rounding out fiscal 2024, the credit giant’s total sales are slated to increase 9% to $65.95 billion with annual earnings expected to climb 19% to $13.40 per share. Notably, American Express has surpassed the Zacks EPS Consensus in three of its last four quarterly reports with an average EPS surprise of 6.53%.Image Source: Zacks Investment Research FY25 Outlook Looking ahead, American Express’s top line is projected to expand another 8% in FY25 to $71.48 billion. More impressive, annual earnings are expected to spike another 14% this year to $15.24 per share.Image Source: Zacks Investment Research AXP Valuation Comparison What may intrigue investors is that AXP still trades at 20.5X forward earnings which is a slight discount to the benchmark S&P 500. AXP also trades nicely beneath Mastercard’s 32.3X but at a noticeable premium to Capital One’s 12.5X.Image Source: Zacks Investment Research Bottom Line Ahead of its Q4 report, American Express stock lands a Zacks Rank #3 (Hold). Although AXP still trades at a reasonable valuation, American Express’s Q4 report will need to reconfirm the company’s attractive outlook after such an extensive rally. However, long-term investors could be rewarded from current levels but better buying opportunities may be ahead, especially in the event of a post-earnings selloff. 7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report American Express Company (AXP): Free Stock Analysis Report Mastercard Incorporated (MA): Free Stock Analysis Report Capital One Financial Corporation (COF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks