BFH vs. AXP: Which Stock Offers Better Value at This Moment?
Written by Emily J. Thompson, Senior Investment Analyst
Source: NASDAQ.COM
Comparison of Stocks: Bread Financial Holdings (BFH) and American Express (AXP) both hold a Zacks Rank of #2 (Buy), indicating positive earnings outlooks, but their valuation metrics suggest differing levels of value for investors.
Valuation Metrics: BFH has a significantly lower forward P/E ratio of 6.29 and a PEG ratio of 0.47, compared to AXP's forward P/E of 24.12 and PEG ratio of 1.98, indicating that BFH may be the better value option.
Value Grades: Based on various valuation metrics, BFH holds a Value grade of A, while AXP has a Value grade of C, further supporting the argument that BFH is currently the superior choice for value investors.
Technological Investment Opportunities: The article highlights the potential of artificial intelligence and quantum computing in reshaping investment opportunities, suggesting that early investors could benefit significantly from stocks in this emerging sector.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AXP is 373.63 USD with a low forecast of 280.00 USD and a high forecast of 425.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
7 Buy
13 Hold
1 Sell
Moderate Buy
Current: 356.990
Low
280.00
Averages
373.63
High
425.00
Current: 356.990
Low
280.00
Averages
373.63
High
425.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
American Express Q4 Earnings Preview: Key Insights and Analyst Ratings
- Revenue Growth Expectations: Analysts predict American Express will report Q4 revenue of $18.88 billion, a 9.9% increase from last year's $17.18 billion, indicating strong performance amid ongoing consumer recovery, which could further bolster market confidence.
- Earnings Per Share Increase: Expected EPS will rise from $3.04 last year to $3.54, marking the seventh consecutive quarter of beating analyst estimates, showcasing the company's sustained profitability and potentially attracting more investor interest.
- Analyst Rating Upgrades: Firms like JPMorgan, TD Cowen, and Barclays have raised their price targets for American Express, reflecting optimistic market expectations for its future performance, which may drive the stock price higher post-earnings report.
- Significant Market Influence: As a key component of the Dow Jones Industrial Average, American Express's earnings report will significantly impact several stocks and ETFs, particularly given its substantial position in Berkshire Hathaway's portfolio, potentially triggering broader market reactions.
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American Express Set to Announce Q4 Earnings
- Earnings Announcement: American Express is set to release its Q4 earnings on January 30 before market open, with consensus EPS estimated at $3.55 and revenue at $18.93 billion, reflecting a 10.2% year-over-year growth amidst strong consumer spending trends.
- Estimate Revisions: Over the past three months, EPS estimates have seen five upward revisions and nine downward adjustments, while revenue estimates experienced ten upward revisions and one downward, indicating market uncertainty regarding the company's future performance.
- Policy Risk: President Trump’s proposal to cap credit card interest rates at 10% could lead to significant operational changes for American Express and a higher risk premium, although analysts believe such a policy is unlikely to be enacted.
- Market Reaction: Stocks of American Express and its peers fell sharply in premarket trading on January 12 as investors priced in worst-case scenarios for net interest margins, highlighting the market's sensitivity to potential policy impacts.
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