Tax Season Refund Growth Boosts Multiple Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 hours ago
0mins
Source: CNBC
- Tax Refund Increase: As of February 13, the average tax refund stands at $2,476, reflecting a 14.2% year-over-year increase, which is expected to positively impact retail stocks, particularly enhancing spending power for low-income households.
- Stimulus Measures Impact: The provisions from the 'One Big Beautiful Bill Act' could provide an average of about $1,000 in stimulus per household, primarily from increased state and local tax deduction caps and a new deduction for overtime pay, leading to larger tax refunds and reduced tax payments.
- Retail Stock Benefits: Analysts highlight Ross Stores as a buy-rated stock that could benefit from increased tax refunds, given its ability to achieve outsized growth during economic volatility and significant new store growth potential, with shares surging nearly 12% this year.
- Consumer Spending Trends: Over a third of consumers plan to use their tax refunds to pay down debt, while 13% intend to save, which could positively impact stocks like Synchrony Financial, with analysts projecting a 25% upside potential from current levels.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise
21 Analyst Rating
8 Buy
12 Hold
1 Sell
Moderate Buy
Current: 342.650
Low
280.00
Averages
379.06
High
425.00
Current: 342.650
Low
280.00
Averages
379.06
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 Future Outlook and Financial Performance
- Emerging Young Consumer Base: As of Q4 2022, 65% of new cardholders are from the Millennial and Gen Z demographics, a trend expected to continue into 2026, indicating increased appeal among younger consumers that will drive future payment activity.
- Strong Financial Performance: Over the past five years, American Express has seen a 100% revenue increase and a 308% rise in earnings per share (EPS), with forecasts of 9% to 10% revenue growth and a 14% increase in EPS for 2026, showcasing robust fundamentals.
- Valuation Considerations: Despite being a high-quality business, American Express currently trades at a price-to-earnings (P/E) ratio of 21.9, which is 20% higher than three years ago, suggesting limited short-term upside and necessitating careful valuation assessments by investors.
- Stock Price Volatility Risks: While the stock has achieved double-digit gains in the past three years, it fell by 10% in 2022, and there are expectations for a potential pullback in 2026, prompting investors to monitor market dynamics to navigate possible downturns.
See More
Tax Season Refund Growth Boosts Multiple Stocks
- Tax Refund Increase: As of February 13, the average tax refund stands at $2,476, reflecting a 14.2% year-over-year increase, which is expected to positively impact retail stocks, particularly enhancing spending power for low-income households.
- Stimulus Measures Impact: The provisions from the 'One Big Beautiful Bill Act' could provide an average of about $1,000 in stimulus per household, primarily from increased state and local tax deduction caps and a new deduction for overtime pay, leading to larger tax refunds and reduced tax payments.
- Retail Stock Benefits: Analysts highlight Ross Stores as a buy-rated stock that could benefit from increased tax refunds, given its ability to achieve outsized growth during economic volatility and significant new store growth potential, with shares surging nearly 12% this year.
- Consumer Spending Trends: Over a third of consumers plan to use their tax refunds to pay down debt, while 13% intend to save, which could positively impact stocks like Synchrony Financial, with analysts projecting a 25% upside potential from current levels.
See More
Investors Favor Dividend Stocks for Passive Income Generation
- Dividend Stocks Attract Investors: Many investors are turning to dividend stocks for passive income, particularly by reinvesting dividends before retirement to enhance cash flow and ensure future financial stability.
- American Express Strong Performance: American Express (AXP) has seen its stock price rise approximately 160% over the past five years; despite a current dividend yield of only 0.95%, the company plans to raise its dividend by 16% this year, reflecting its robust financial health and commitment to shareholder returns.
- Realty Income's Steady Cash Flow: Realty Income (REIT) owns about 15,500 properties across 50 states and several European countries, offering a 4.93% dividend yield; while it has only gained 10% over the past five years, it has surged 15% year-to-date, showcasing its stable cash flow and a 98.7% occupancy rate.
- Advantages of Reinvesting Dividends: Investors can opt to reinvest Realty Income's monthly cash distributions, ensuring higher future dividend payouts, thereby enhancing long-term investment returns.
See More
American Express and Bank of America: Reliable Dividend Stocks
- Durability of American Express: As one of the oldest companies in the U.S., founded in 1850 and celebrating its 175th anniversary, American Express showcases remarkable adaptability by embracing fintech and refreshing its rewards program to attract younger consumers, ensuring ongoing growth.
- Significant Revenue Growth: American Express reported a 10% year-over-year revenue increase in Q4 2025, with Gen Z spending rising 38%, despite accounting for only 6% of total revenue, indicating substantial future growth potential for the company.
- Expansion Strategy of Bank of America: As the second-largest bank in the U.S., Bank of America achieved a 13% increase in earnings per share in 2025, with a 1.28 percentage point rise in return on tangible common equity (ROTCE) and a 3% increase in deposits, reflecting strong performance in consumer banking.
- Application of Artificial Intelligence: Bank of America leverages AI to enhance efficiency, maintaining stable headcount while expecting reductions this year, and with a dividend yield of 2.1% after over 20 years of consistent payments, it offers investors a reliable source of passive income.
See More
Analysis of Bill & Melinda Gates Foundation Trust Investment Portfolio
- Portfolio Size: The Bill & Melinda Gates Foundation Trust holds a portfolio valued at approximately $36.6 billion, with nearly 30%, or close to $11 billion, invested in Berkshire Hathaway, indicating strong conviction in the company and reflecting the deep relationship between Gates and Buffett.
- Buyback Strategy: Berkshire Hathaway repurchased over $70 billion worth of its own shares between 2020 and 2024, with Buffett considering buybacks a smart use of capital when shares trade below intrinsic value, although this activity has paused due to elevated market valuations.
- Cash Reserves: As of the latest disclosure, Berkshire holds a record $382 billion in cash and short-term Treasury bills, providing the liquidity needed to act swiftly during market downturns and seize investment opportunities, similar to its actions following the 2008 financial crisis.
- Leadership Transition: While Buffett remains chairman, he will step down as CEO at the end of 2025, with successor Greg Abel already playing a significant role in operations; the company's decentralized structure ensures that daily operations do not rely on any single leader.
See More
Berkshire Hathaway's Cash Reserves and Gates Foundation Investments
- Cash Reserve Advantage: Berkshire Hathaway currently holds a record $382 billion in cash reserves, enabling it to swiftly capitalize on investment opportunities during market downturns, thereby enhancing its competitive edge in uncertain market environments.
- Gates Foundation Investment: The Gates Foundation Trust's portfolio is valued at approximately $36.6 billion, with nearly 30% (close to $11 billion) invested in Berkshire Hathaway, reflecting the long-standing friendship and investment trust between Bill Gates and Warren Buffett.
- Stock Buyback Strategy: Berkshire repurchased over $70 billion of its own shares between 2020 and 2024, and although it has paused buybacks due to high market valuations, this strategy previously yielded significant capital returns, showcasing its flexible capital management capabilities.
- Leadership Transition: Warren Buffett will step down as CEO at the end of 2025, with successor Greg Abel already playing a crucial role in operations; the company's decentralized structure ensures long-term stability and growth potential.
See More
American Express Future Outlook and Financial Performance
- Emerging Young Consumer Base: As of Q4 2022, 65% of new cardholders are from the Millennial and Gen Z demographics, a trend expected to continue into 2026, indicating increased appeal among younger consumers that will drive future payment activity.
- Strong Financial Performance: Over the past five years, American Express has seen a 100% revenue increase and a 308% rise in earnings per share (EPS), with forecasts of 9% to 10% revenue growth and a 14% increase in EPS for 2026, showcasing robust fundamentals.
- Valuation Considerations: Despite being a high-quality business, American Express currently trades at a price-to-earnings (P/E) ratio of 21.9, which is 20% higher than three years ago, suggesting limited short-term upside and necessitating careful valuation assessments by investors.
- Stock Price Volatility Risks: While the stock has achieved double-digit gains in the past three years, it fell by 10% in 2022, and there are expectations for a potential pullback in 2026, prompting investors to monitor market dynamics to navigate possible downturns.
See More
Tax Season Refund Growth Boosts Multiple Stocks
- Tax Refund Increase: As of February 13, the average tax refund stands at $2,476, reflecting a 14.2% year-over-year increase, which is expected to positively impact retail stocks, particularly enhancing spending power for low-income households.
- Stimulus Measures Impact: The provisions from the 'One Big Beautiful Bill Act' could provide an average of about $1,000 in stimulus per household, primarily from increased state and local tax deduction caps and a new deduction for overtime pay, leading to larger tax refunds and reduced tax payments.
- Retail Stock Benefits: Analysts highlight Ross Stores as a buy-rated stock that could benefit from increased tax refunds, given its ability to achieve outsized growth during economic volatility and significant new store growth potential, with shares surging nearly 12% this year.
- Consumer Spending Trends: Over a third of consumers plan to use their tax refunds to pay down debt, while 13% intend to save, which could positively impact stocks like Synchrony Financial, with analysts projecting a 25% upside potential from current levels.
See More
Investors Favor Dividend Stocks for Passive Income Generation
- Dividend Stocks Attract Investors: Many investors are turning to dividend stocks for passive income, particularly by reinvesting dividends before retirement to enhance cash flow and ensure future financial stability.
- American Express Strong Performance: American Express (AXP) has seen its stock price rise approximately 160% over the past five years; despite a current dividend yield of only 0.95%, the company plans to raise its dividend by 16% this year, reflecting its robust financial health and commitment to shareholder returns.
- Realty Income's Steady Cash Flow: Realty Income (REIT) owns about 15,500 properties across 50 states and several European countries, offering a 4.93% dividend yield; while it has only gained 10% over the past five years, it has surged 15% year-to-date, showcasing its stable cash flow and a 98.7% occupancy rate.
- Advantages of Reinvesting Dividends: Investors can opt to reinvest Realty Income's monthly cash distributions, ensuring higher future dividend payouts, thereby enhancing long-term investment returns.
See More
American Express and Bank of America: Reliable Dividend Stocks
- Durability of American Express: As one of the oldest companies in the U.S., founded in 1850 and celebrating its 175th anniversary, American Express showcases remarkable adaptability by embracing fintech and refreshing its rewards program to attract younger consumers, ensuring ongoing growth.
- Significant Revenue Growth: American Express reported a 10% year-over-year revenue increase in Q4 2025, with Gen Z spending rising 38%, despite accounting for only 6% of total revenue, indicating substantial future growth potential for the company.
- Expansion Strategy of Bank of America: As the second-largest bank in the U.S., Bank of America achieved a 13% increase in earnings per share in 2025, with a 1.28 percentage point rise in return on tangible common equity (ROTCE) and a 3% increase in deposits, reflecting strong performance in consumer banking.
- Application of Artificial Intelligence: Bank of America leverages AI to enhance efficiency, maintaining stable headcount while expecting reductions this year, and with a dividend yield of 2.1% after over 20 years of consistent payments, it offers investors a reliable source of passive income.
See More
Analysis of Bill & Melinda Gates Foundation Trust Investment Portfolio
- Portfolio Size: The Bill & Melinda Gates Foundation Trust holds a portfolio valued at approximately $36.6 billion, with nearly 30%, or close to $11 billion, invested in Berkshire Hathaway, indicating strong conviction in the company and reflecting the deep relationship between Gates and Buffett.
- Buyback Strategy: Berkshire Hathaway repurchased over $70 billion worth of its own shares between 2020 and 2024, with Buffett considering buybacks a smart use of capital when shares trade below intrinsic value, although this activity has paused due to elevated market valuations.
- Cash Reserves: As of the latest disclosure, Berkshire holds a record $382 billion in cash and short-term Treasury bills, providing the liquidity needed to act swiftly during market downturns and seize investment opportunities, similar to its actions following the 2008 financial crisis.
- Leadership Transition: While Buffett remains chairman, he will step down as CEO at the end of 2025, with successor Greg Abel already playing a significant role in operations; the company's decentralized structure ensures that daily operations do not rely on any single leader.
See More
Berkshire Hathaway's Cash Reserves and Gates Foundation Investments
- Cash Reserve Advantage: Berkshire Hathaway currently holds a record $382 billion in cash reserves, enabling it to swiftly capitalize on investment opportunities during market downturns, thereby enhancing its competitive edge in uncertain market environments.
- Gates Foundation Investment: The Gates Foundation Trust's portfolio is valued at approximately $36.6 billion, with nearly 30% (close to $11 billion) invested in Berkshire Hathaway, reflecting the long-standing friendship and investment trust between Bill Gates and Warren Buffett.
- Stock Buyback Strategy: Berkshire repurchased over $70 billion of its own shares between 2020 and 2024, and although it has paused buybacks due to high market valuations, this strategy previously yielded significant capital returns, showcasing its flexible capital management capabilities.
- Leadership Transition: Warren Buffett will step down as CEO at the end of 2025, with successor Greg Abel already playing a crucial role in operations; the company's decentralized structure ensures long-term stability and growth potential.
See More
