Over the past three months, American Express Co (AXP, Financial) has experienced a notable surge in its stock price, with a 21.35% gain, reflecting a robust performance in the credit services industry. Despite a slight dip of 0.32% over the past week, the company's market capitalization stands strong at $161.47 billion, with the current stock price at $224.25. This recent growth trajectory has brought the company's valuation in line with the GF Value, which is currently set at $217.85, indicating that the stock is fairly valued. Just three months prior, the GF Value was slightly lower at $217.38, suggesting that American Express was modestly undervalued at that time.
Introduction to American Express Co
American Express Co, a stalwart in the credit services industry, offers a suite of financial products and services that cater to a global clientele. The company's portfolio includes charge and credit card payment products and a merchant payment network. American Express operates through three primary segments: global consumer services, global commercial services, and global merchant and network services. Beyond payment solutions, it provides business clients with expense management tools, consulting services, and business loans, reinforcing its position as a comprehensive financial services provider.
Assessing American Express's Profitability
With a Profitability Rank of 7/10, American Express Co demonstrates strong financial health and consistent profitability. The company's Return on Equity (ROE) is an impressive 31.53%, outperforming 95.52% of 513 companies in the industry. Its Return on Assets (ROA) stands at 3.43%, which is better than 65.61% of its peers. Notably, American Express has maintained profitability for the past 10 years, a testament to its solid business model and operational efficiency.
Growth Prospects of American Express
The company's Growth Rank is at a perfect 10/10, indicating exceptional growth in both revenue and profitability. The 3-Year Revenue Growth Rate per Share is at 22.20%, surpassing 77.1% of 489 companies in the same industry. Over a 5-year period, the Revenue Growth Rate per Share is 11.60%, better than 67.13% of its competitors. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 8.80%. The 3-Year EPS without NRI Growth Rate stands at a robust 43.20%, and the 5-Year EPS without NRI Growth Rate is 10.30%. The EPS Growth Rate (Future 3Y To 5Y Est) is anticipated to be 14.67%, reflecting the company's strong growth potential.
Influential Shareholders in American Express
Notable investors have taken significant positions in American Express, with Warren Buffett (Trades, Portfolio) leading the pack, holding 151,610,700 shares, which translates to a 20.94% stake in the company. Following him is Ken Fisher (Trades, Portfolio) with 9,778,289 shares, representing a 1.35% shareholding. First Eagle Investment (Trades, Portfolio) holds 2,601,210 shares, accounting for 0.36% of the company's shares. These major holders' investments underscore their confidence in American Express's financial stability and growth prospects.
Competitive Landscape
When compared to its competitors, American Express Co holds a commanding market position with a market capitalization of $161.47 billion. This places it well ahead of PayPal Holdings Inc (PYPL, Financial) with a market cap of $65.44 billion, Capital One Financial Corp (COF, Financial) at $54.6 billion, and Discover Financial Services (DFS, Financial) at $31.26 billion. American Express's substantial market cap reflects its dominance and the scale of its operations within the credit services sector.
Conclusion
In summary, American Express Co's stock has shown a remarkable performance recently, with a significant 21.35% increase over the past three months. The company's current valuation aligns with the GF Value, indicating that it is fairly valued. American Express's strong profitability and growth metrics, combined with the confidence shown by major shareholders like Warren Buffett (Trades, Portfolio), position the company favorably for future success. Compared to its competitors, American Express maintains a superior market cap, further solidifying its leading status in the industry. Investors and market watchers alike will be keen to see how the company continues to navigate the dynamic financial landscape.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
