AXP - Can American Express (AXP) sustain a $189 valuation ahead of Q4 earnings?
2024-01-10 11:42:50 ET
American Express Company (NYSE:AXP) continues to be on the watchlist for many investors. The ex-dividend date earlier in January was a key factor supporting the stock price. American Express is also set to release earnings on January 26. Considering strong earnings growth expectations, AXP could sustain the $189 valuation in the near term.
American Express remains an attractive stock pick for value investors. Long-term investors can still lock value by buying the stock at the current valuation. However, we expect American Express to pull back in the near term. Our target is a valuation of $162 in the near term, particularly after the earnings release.
Analysts have been haggling over the valuation of AXP in recent weeks and days. The most pessimistic analysts project the stock dipping to levels between $155 and $125. The optimistic analysts consider that AXP will rise to levels between $203 and $235. We think that AXP will remain above $162 but below $190.
American Express has support at $162 and resistance at $190
American Express faces resistance at $190. Added to the fact that the RSI shows overbought, the stock is unlikely to break the resistance. The only factor that could result in the stock rising above $190 is earnings that beat analyst expectations. Analysts already expect 12% earnings growth. That information has been factored into the current valuation.
The more likely scenario is of the stock pulling back to $162. The stock is already pulling back after topping $189. We think that AXP has support at $162 from both technical and fundamental analysis. Our analysis also showed a seasonal pattern, in line with which we anticipate a declining phase after earnings. Investors should be on the lookout for the pattern to unlock important buying signals.
Summary
The analysis shows that AXP will sustain a valuation of around $189 ahead of earnings. Amidst changing analyst ratings, investors await to see how the earnings compare to expectations. If the earnings significantly beat the expectations, AXP could test the resistance levels.
The near-term pattern is expected to follow the longer-term trend. We hope to see valuations dropping to about $162 before the stock regains. The stock will remain attractive for investing at the $162 valuation.
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