American Express will report earnings in a little less than a month
Credit card company and consumer credit giant American Express Company (NYSE: AXP) will step into the earnings stand and announce the results for the second quarter on Friday, July 23rd, before the opening. In recent history, American Express has exceeded earnings expectations in three of the last four earnings reports. The reactions after winning tell a different story, however.
AXP’s last four post-earnings responses have been on the downside, including a 4.1% decline in January. All in all, the share recorded an average of hesitant development after a gain of 2.4% in the last eight quarters, regardless of direction.
American Express stock hit a record high of $ 168.46 on the charts today and is up 39.2% year-to-date. Along the way, the 40-day rising moving average for stocks contained setbacks in March, April and June. The company also has a forward dividend of $ 1.72 and a dividend yield of 1.04%.
Options are currently well valued from a volatility perspective. The stock’s Schaeffer’s Volatility Index (SVI) of 22% is above 5% of all other values in its annual range, suggesting that option players are currently pricing in relatively low volatility expectations.
From a fundamental perspective, American Express appears to be overvalued right now. AXP is currently trading at a high price-to-earnings ratio of 27.21, and American Express stock’s price-to-earnings ratio at 24.57 isn’t much of an improvement.
However, AXP still has plenty of scope to recover after seeing a 16% drop in sales and a 54% net income drop in 2020 due to the Covid-19 pandemic. In fact, American Express’s trailing 12-month net income is already up 65% compared to the company’s 2020 numbers. Overall, American Express stock is likely to continue to experience slow and steady long-term growth. Investors may want to hold back with a better entry point given the all-time highs and time-tested mantra. Buy low, sell high.