American Express (AXP) Stock Forecast & Price Target

American Express reported a 3.3% sequential and 8.7% year-over-year increase in revenues, reaching $17.2 billion, driven primarily by strong performance in discount revenues, which rose 4.5% sequentially and 7.0% year-over-year to $9.2 billion. The company also saw a notable increase in fees, up 4.0% sequentially and 7.8% year-over-year, contributing to total fee revenue of $13.1 billion, while net interest income grew 0.8% sequentially and 12.0% year-over-year to $4.0 billion. Furthermore, card member loans and billings demonstrated solid growth, increasing 3.8% sequentially and 10.9% year-over-year, and 5.2% sequentially and 6.8% year-over-year, respectively, indicating robust consumer engagement and a positive trend in credit quality.

The decline in the CET1 ratio to 10.5% suggests potential weaknesses in capital adequacy, which may raise concerns amidst a challenging economic landscape. Furthermore, the expectation of lower volumes and revenues due to a sustained recessionary environment could negatively impact the firm’s financial performance, compounded by potential increases in net write-downs and provisioning. Additionally, an evolving competitive landscape may hinder American Express's ability to attract and retain customers, risking market share erosion and reduced global acceptance rates.