Bill Cara

American Express (AXP) Quarterly Report for Maverick Investors

November 9, 2023,   $152.37

Business Overview:

  • Founded in 1850, American Express Co. is a financial services corporation that provides charge and credit card products and travel-related services worldwide. The company operates through the Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services.

Maverick Guidance:

  • Short-term stock buy/sell recommendation: SELL after the recent bounce
  • Long-term stock recommendation: AVOID UNTIL AXP DROPS TO ACCUMULATION ZONE
  • 10-YEAR Average Annual Return = +8.08% to November 8, 2023 (3RD Quartile)
  • My Oct 22 Maverick Guidance worked out: “Wall Street is presently overly negative, promoting the impact its doom and gloom economic forecast will have on business and consumer spending and card use. This is a time for Mavericks to buy on spike bottoms.” But this is a time to avoid further purchases until AXP hits LT ACCUMULATION ZONE.
  • Nov 9 Maverick Guidance is to AVOID. Economic contraction is a serious concern.

Consideration for Maverick Portfolio:

  • Appropriate for risk profile score of 16-21. The Moderately Conservative Investor aims for a balanced approach that combines growth and stability. The Maverick CAUTIOUS GROWTH portfolio is designed to achieve modest medium-term total returns.
  • Too many internal weaknesses and external threats and a weak 10-year total return performance (i.e., Insufficient growth) keep AXP from being an appropriate MODERATE or AGGRESSIVE GROWTH candidate, regardless of AXP being a Warren Buffett favorite.

Market Guidance:

  • Consensus Analyst Ratings— MarketBeat = Moderate Buy, TipRanks = Moderate Buy.
  • 15 Wall Street analysts have offered 12-month price targets for AXP in the last 3 months. There are 8 Buy, 7 Hold, and zero Sell. (from TipRanks)
  • Based on 12 Wall Street analysts offering 12-month price targets for American Express in the last 3 months. The average price target is $176.00, with a high forecast of $201.00 and a low forecast of $148.00. The average price target represents a 15.5% change from the last price of $152.37. (from TipRanks)
  • Dividend Yield: $0.60 per share paid quarterly to yield 1.52%. Dividend growth for over 15 years. (from TipRanks)
  • Technical Analysis:
  • =  Daily: BUY       Weekly: SELL

  • = Daily: BUY       Weekly: NEUTRAL

Value Line Guidance: (all data from VL) (Nov. 3 Report)

  • Company Financial Strength Rating:  A++

Share Price Safety, Market Timing, Technical Rank: 1=best. 5=worst

  • Share Price Safety:             2 of 5
  • Market Timing:                   1 of 5
  • Technical Rank:                  3 of 5
  • Beta: 35
  • Stock’s Price Stability:                 60/100
  • Price Growth Persistence:          60/100
  • Earnings Predictability:              55/100
  • Projected Average Annual PE:  16
  • Average Annual Revenue Growth in the past 5 years:       10.0%
  • Average Annual Revenue Growth for the next 5 years:      12.5%
  • Average Annual Earnings Growth in the past 5 years:         7.0%
  • Average Annual Earnings Growth for the next 5 years:       8.5%
  • Average Annual Dividend Growth in the past 5 years:         8.5%
  • Average Annual Dividend Growth for the next 5 years:      11.0%
  • Projected Average Annual Dividend Yield in 3 to 5 years:   1.6%

American Express Company Q3 September 2023 Financial Highlights (Reported Oct. 20)

  • A sixth consecutive quarter of record revenue, up +13% from the year earlier to $15.4 Billion.
  • Record earnings per share, increasing by + 34% from a year earlier.
  • Net income of $2.5 billion, or $3.30 per share, compared to $1.9 billion, or $2.47 per share, a year ago.
  • Strong Card Member spending, up 7% on an FX-adjusted basis.
  • Momentum in Travel and Entertainment spending, up 13% on an FX-adjusted basis.
  • Millennial and Gen Z consumers are driving growth, with spending up 18% in the U.S. from a year earlier.
  • Third-quarter consolidated total revenues net of interest expense at $15.4 billion, up 13% from a year ago.
  • Strong credit metrics, with net write-off and delinquency rates below pre-pandemic levels.
  • Consolidated provisions for credit losses at $1.2 billion, up from $778 million a year ago.
  • Consolidated expenses at $11.0 billion, up 7% from a year ago, primarily due to higher customer engagement costs.
  • Consolidated effective tax rate at 20.9%, down from 23.6% a year ago.
  • Segment-wise pretax income for U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services.
  • Corporate and Other reported a third-quarter pretax loss of $709 million.

Q2 June 2023 Quarter:

  • Earnings per share climbed 12.5% to $2.89, reflecting a 12.4% revenue increase from strong card member spending levels.
  • Millennial and Gen Z consumers remain the fastest-growing customer group.
  • Provision for credit losses almost tripled due to rising net write-offs.
  • Cash and equivalents stood at approximately $43.0 billion, while the common equity tier 1 capital ratio was 10.6%.
  • Quarterly distribution was raised 15.4% to $0.60 a share.
  • Stock buybacks of 20 million AXP shares for $3.3 billion and $1.6 billion in common stock dividends were executed in 2022.

Q1 March 2023 Quarter:

  • Revenues rose sharply due to strong card member spending levels.
  • Increased expenses and provision for credit losses were noted.
  • Earnings per share were expected to recover by 4% for the year.
  • The company introduced American Express Business Blueprint for small firms, focusing on digital solutions and acquisitions.
  • Quarterly distribution was increased by 15.4% to $0.60 a share.

Q4 December 2022 Quarter:

  • Limited progress on the earnings front was observed despite a significant revenue increase.
  • Provision for credit losses and total expenses saw notable upticks.
  • Plans to acquire Nipendo, a company enabling B2B payment automation, were disclosed.
  • Capital gains potential was noted, but long-term upside possibilities were below the Value Line median.

Financial Performance

  • 10-year Average Annual Total Return: +8.08% (through Nov.8, 2023) (Dow 30 3rd quartile).
  • EPS:
    • 2020: $3.77
    • 2021: $10.02
    • 2022: $9.85
    • 2023: e$10.45 > e$11.75          (latest Value Line Quarterly Report)
    • 2024: e$10.95 > e$11.00         (latest Value Line Quarterly Report)
  • Current PE:      14.3   (FinViz)
  • Forward PE:     12.4   (FinViz)
  • PEG Ratio:       0.96   (FinViz)
  • Beta:                  1.20   (FinViz)

SWOT Analysis:

Internal Strength/Weakness


  • Market Position: Global market leader and good market hold.
  • Financial Strength: Strong free cash flows.
  • Brand Portfolio: Investment in a strong brand portfolio.
  • Operational Efficiency and Scalability: Leader in automation.
  • Customer Relations: High customer satisfaction and loyalty.
  • Supply Chain: Reliable suppliers and no supply bottlenecks.
  • Dealer Network: Dealer culture promoting product benefits and training.
  • Distribution Network: Reliable global distribution network.


  • AmEx charges higher fees to merchants: This policy limits card acceptance among smaller businesses.
  • Cardholders view Amex’s premium and annual fees as too steep.
  • Customer relationships must improve: This is a difficult qualitative factor and a long-term challenge to overcome.
  • The Consumer Financial Services industry is growing faster than the company.
  • AmEx has to carefully analyze trends and determine what it needs to do to drive future growth.
  • Difficulty in countering challenges from new market entrants: The business model can be easily imitated.
  • AmEx must build a platform model that integrates suppliers, vendors, and end users.
  • Limited success outside the core business: The AmEx product line concentrates on one or two main goods.
  • Niche markets and local monopolies to exploit are fast disappearing: The customer network is proving less and less effective.
  • Traveler’s check business is drastically declining: It has to be revitalized.
  • Debit card Shortage:  It hinders potential market expansion.
  • High attrition rate and increased spending on employee training: Employee turnover leads to higher salaries to maintain talent.
  • Declining per unit revenue: Ineffective product demand forecasting leads to missed opportunities and puts downward pressure on profitability.

External Opportunities/Threats


  • International Expansion: Exploring opportunities in global markets.
  • New Environmental Policies: Leveraging technology for gaining market share in new product categories.
  • Loosening Regulations: Capitalizing on regulatory changes.
  • Government Green Drive: Procuring contracts for green products from state and federal governments.
  • New Taxation Policy: Identifying ways to increase profitability amidst policy changes.
  • Core Competencies Expansion: Diversifying into related product segments.
  • New Trends in Consumer Behavior: Identifying and entering markets aligned with changing behaviors.
  • Diversification and New Revenue Streams: Exploring opportunities in new product categories.
  • Stable Free Cash Flow: Investing in adjacent product segments and new technologies.
  • Lower Inflation Rate Benefits: Leveraging rates for customer benefit.
  • New Online Customer Channels: Utilizing online platforms and data analytics for better service.
  • Fragmented Financial Market Opportunities: Identifying prospects in a diverse market.
  • Capitalizing on Reduced Competition: Gaining market share in less competitive environments.
  • Synergies from Acquisitions: Leveraging advantages from strategic acquisitions.
  • Adoption of New Financial Technologies: Exploring tech-driven revenue opportunities.
  • Streamlining Operations: Divesting non-core assets to optimize operations.


  • Varied Liability Laws: Exposed to liability claims due to differing laws in various countries.
  • Counterfeit Products: Risk of imitation and low-quality products, particularly in emerging and low-income markets.
  • Shortage of Skilled Workforce: Lack of skilled workers in certain global markets impacting steady profit growth.
  • Intense Competition: Stable profitability attracts more players, leading to downward pressure on sales and profitability.
  • Currency Fluctuations: Exposure to currency fluctuations, particularly in politically volatile markets.
  • Increasing Isolationism: Rising isolationism in the American economy potentially impacts international sales.
  • Irregular Innovation Supply: Unpredictable supply of innovative products leading to sales fluctuations.
  • The shift in Consumer Behavior: Changing consumer preference toward online channels threatens the existing physical infrastructure-driven supply chain model.

FinViz Snapshot:

10-Year Historical Price Chart: (from


 Point & Figure Chart: (from,PWTADANRNO[PA][D][F1!3!!!2!20]


 Why participate as a Maverick Investor?

Why participate as a Maverick Investor?

Bill Cara has written “The Maverick Investor’s Handbook”  for novices, students, career-changers, and retirees who seek to build a lifelong securities portfolio. You are encouraged to break away from ubiquitous, overwhelming, and often misleading Wall Street advice and become a maverick investor, confident in a simple yet effective strategy that outperforms Wall Street.

By taking the “boring” maverick approach to investing, tailored to your needs, and focusing on a well-understood portfolio of world-class companies, impressive results are within reach. You will discover Maverick’s essence through mindset development, creating a portfolio of just ten prominent companies, fully understanding the risks and rewards of your investments, and seeking support from when you need it.

Free ongoing education through daily commentary, weekly articles, and a monthly report is available to keep you on track for success.

With “The Maverick Investor’s Handbook” and the accompanying “Cracking the Maverick Investor Code,” you can unlock the potential of your investment funds today and embark on a lifelong journey towards financial empowerment and growth with the help of an industry guru who became Forbes “Best of the Web.”