American Express Stock Fair Value – American Express Reports Earnings for Q2 2023
July 23, 2023
🌥️Earnings Overview
On July 21, 2023, AMERICAN EXPRESS ($NYSE:AXP) released their earnings for the second quarter of fiscal year 2023, which ended June 30, 2023. Total revenue for the quarter totaled USD 15.1 billion, showing a 12.3% rise from the same quarter in the previous year. Net income also increased to USD 2.2 billion, a 10.7% increase from the same period in the prior year.
Market Price
American Express reported their second quarter earnings for 2023 on Friday, and the stock opened at $172.2 and closed at $170.2. This is a 3.9% decrease from the previous closing price of $177.1. The company’s earnings call gave investors insight into how the company has been performing, and what strategies they are looking to employ in order to stay competitive in the market. The company reported an overall increase in revenue for the second quarter, with total net revenue coming in at $10.7 billion, an increase of 1% year-over-year. American Express CEO Stephen Squeri attributed the company’s success to their focus on customer loyalty and satisfaction.
The company has recently rolled out several new initiatives, including a rewards program for cardholders and an increased focus on digital payment solutions. These efforts have paid off, as the company has seen increased customer engagement and satisfaction levels. With a renewed focus on customer loyalty and satisfaction, as well as increased adoption of digital payment solutions, the company is well-positioned to continue its growth trajectory in the coming quarters. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for American Express. More…
| Total Revenues | Net Income | Net Margin |
| 56.79k | 7.33k | 13.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for American Express. More…
| Operations | Investing | Financing |
| 16.82k | -33.69k | 24.51k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for American Express. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 245k | 218k | 35.32 |
Key Ratios Snapshot
Some of the financial key ratios for American Express are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 12.1% | – | – |
| FCF Margin | ROE | ROA |
| 26.5% | 22.2% | 2.4% |
Analysis – American Express Stock Fair Value
At GoodWhale, we recently conducted an analysis of the fundamentals of AMERICAN EXPRESS. Our proprietary Valuation Line showed us that the intrinsic value of the AMERICAN EXPRESS share is $196.7. Currently, the stock price is at $170.2, making it a good buy as it is undervalued by 13.5%. More…
Peers
Amex is known for its credit card, charge card, and traveler’s cheque businesses. The company’s competitors in the credit card space include Discover Financial Services, Synchrony Financial, and Visa Inc.
– Discover Financial Services ($NYSE:DFS)
Discover Financial Services has a market cap of 28.54B as of 2022, a Return on Equity of 26.11%. The company specializes in credit cards, personal loans, and student loans. It also offers banking products such as checking and savings accounts. Discover is one of the largest credit card issuers in the United States. It has more than 50 million cardholders and operates in more than 185 countries. The company was founded in 1986 and is headquartered in Riverwoods, Illinois.
– Synchrony Financial ($NYSE:SYF)
Synchrony Financial is a consumer financial services company with a market cap of 16.02B as of 2022. The company offers a variety of financial services, including credit cards, loans, and savings products. Synchrony Financial has a return on equity of 20.2%. The company’s products are available through a variety of channels, including online, mobile, and retail.
– Visa Inc ($NYSE:V)
Visa Inc is a multinational financial services corporation headquartered in Foster City, California, United States. The company facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards and debit cards. Visa does not issue cards, extend credit, or set rates and fees for consumers. Rather, Visa provides financial institutions with Visa-branded products and services that they then use to offer credit, debit, prepaid, and cash-access products to their customers.
In terms of market cap, as of 2022, Visa Inc has a market cap of 436.4B. In terms of ROE, the company has a ROE of 32.85%. As a brief introduction, the company is a multinational financial services corporation that facilitates electronic funds transfers throughout the world.
Summary
American Express reported its second quarter fiscal year 2023 earnings on July 21, 2023, showing a 12.3% year-over-year increase in total revenue to USD 15.1 billion and a 10.7% rise in net income to USD 2.2 billion. The stock price for the company dropped the same day, making it a good opportunity for investors looking to get into the company at a lower price. With the strong performance in the second quarter, American Express looks like a solid investment option, as it is well-positioned to maintain its growth momentum in the future.
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