American Express (NYSE: AXP) stock has been a topic of discussion among investors and analysts. The company’s recent earnings report and the subsequent dip in its stock price have drawn attention from market watchers. Jim Cramer, the host of CNBC’s “Mad Money,” has urged investors to consider buying American Express stock after the recent dip.
Cramer highlighted the company’s success in attracting younger customers, particularly Millennials and Gen Z members, who he believes will stick with the company for decades to come. Despite a slight revenue miss and a downward revision of its full-year forecast, American Express reported a significant earnings beat. The company’s revenue (net of interest expenses) grew by 8% year-on-year to $16.64 billion, slightly missing the analyst consensus estimate of $16.67 billion.
However, the adjusted EPS of $3.49 beat the analyst consensus estimate of $3.28. Cramer emphasized the company’s strong earnings and credit quality, which he believes will improve further with the Federal Reserve’s ongoing interest rate cuts.
Cramer praises AmEx investment potential
He also lauded American Express for its success in attracting younger cardholders, a demographic he believes has a higher lifetime value than older customers. The company’s CFO, Christophe Le Caillec, noted on the earnings call that they are seeing strong loyalty from Millennial and Gen Z members. Despite the mixed results, analysts noted the company’s higher loan volumes, stable growth in Card Member spending, and accelerated card fee revenue growth.
Earlier in October, American Express announced that it would become the sole owner of Swisscard after UBS Group AG. The company’s stock price fell by over 2% following the earnings report, but Cramer believes that Wall Street is underestimating the company’s earnings strength and potential for long-term growth. Technical analysis also suggests potential trading opportunities for American Express stock.
The data reveals several trading strategies based on various trading timeframes, including longer-term, swing, and day trading plans. As with any investment, it is essential to consider the risks and conduct thorough research before making a decision. However, the recent dip in American Express stock price and the company’s strong fundamentals may present an opportunity for investors who believe in the company’s long-term growth potential.
