2023-10-20 12:10:41 ET
American Express Company (NYSE: AXP) is down 3.0% on Friday even though it reported better-than-expected results for its fiscal third quarter.
AMEX says credit metrics are holding up well
The financial services firm reported provisions for credit losses of $1.2 billion versus $778 million a year ago suggesting higher net write-offs.
Still, American Express said credit metrics of its customers were holding up well. Delinquency rates, as per its press release , remain below levels seen before the pandemic. According to CEO Stephen Squeri:
We believe we’re well positioned as we seek to achieve our long-term growth plan aspirations in 2024 and beyond in a steady-state macro environment.
Nonetheless, Citi analyst Keith Horowitz maintained his “sell” rating on AXP today and lowered the price target to $143 – roughly where the stock is already trading at writing.
Watch here: https://www.youtube.com/embed/ZAPxw9ZWBKY?feature=oembedAmerican Express Q3 financial highlights
- Earned $2.45 billion versus the year-ago $1.88 billion
- Per-share earnings also went up from $2.47 to $3.30
- Revenue climbed 13% year-on-year to $15.38 billion
- Consensus was $2.95 a share on $15.36 billion revenue
- Cardholder spending jumped 7.0% year-over-year in Q3
American Express said travel and leisure/entertainment continued to be the centre of spending in its recently concluded quarter. On CNBC’s “ Squawk on the Street ”, Nathan Sheets – the Global Chief Economist of Citi said:
The U.S. consumer has been exceptionally strong. It’s really hard, at this stage, to see much evidence of a meaningful slowing in the consumer.
Earlier this week, the U.S. Census Bureau said retail sales were up a more than expected 0.7% in September.
“Millennial and Gen Z consumers continue to be the fastest-growing portion of our cardmember base," American Express CEO Steve Squeri told analysts on a conference call.
— Bloomberg TV (@BloombergTV) October 20, 2023
Alix Steel and Guy Johnson discuss https://t.co/mA72zevYAG pic.twitter.com/XNwNGLK1wN
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