CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We increase our 12-month target price by $65 to $270, applying a forward P/E of 18.8x our 2025 earnings estimate, a wider risk premium than the peer average of 7.1x given more consistent earnings performance, lower credit risk, and superior growth prospects. We raise our 2024 EPS estimate by $0.24 to $12.98 and start 2025’s at $14.40. AXP reported Q4 EPS of $2.62 vs. $2.07 a year ago, a $0.03 earnings miss. Although some may fixate on slowing spending trends (discount revenue +5% Y/Y vs. 7% in Q3), we believe this quarter highlighted AXP’s diversified business model, which can outperform in a variety of scenarios. Leading the charge this quarter was net interest income, which surged 31% higher on 13% loan growth. Additionally, net card fees (+17%) continued their march upward with the mystique of AXP products, giving us reassurance that AXP will have minimal pushback when raising annual fees in the future. Given the slowdown in spending, AXP saw expense pressures ease with its rewards cost rising just 3%.