Will American Express’s Stock Do More?

With shares of American Express Company (NYSE:AXP) trading at around $64.56, is AXP an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

American Express is a well-run company with steady top-line growth, and the stock has seen significant gains over the past several years. However, that doesn’t necessarily mean it’s a safe option at the moment. We’ll get to that soon. For now, let’s take a look at the positives and negatives for American Express. The positives greatly outweigh the negatives.

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American Express has seen strong growth in card spending, an improved loan portfolio, an improvement in loss rate, strong billings, increased international exposure through acquisitions and partnerships, and it has been developing new products and services which has led to new revenue streams. American Express also issues its own cards. Therefore, it doesn’t need to rely on merchants to process transactions. The biggest negative has been increased marketing expenses. That said, there is one much larger potential negative waiting in the weeds, which we’ll cover in the Trends section.

For now, let’s take a look at more important numbers prior to forming an opinion on the stock.