Why American Express (AXP) is a Top Stock for the Long-Term

Zacks promotes its Focus List, a portfolio of 50 stocks selected based on earnings estimate revisions and its proprietary Zacks Rank, which has historically outperformed the S&P 500, returning 2,519.23% cumulatively versus the S&P's 854.95% from 1996 to 2021. American Express (AXP) is cited as a successful example, with its shares gaining 110.3% since its inclusion in December 2021, driven by recent upward revisions to its 2025 earnings estimates by analysts and expected 14.3% growth for the current fiscal year. The methodology emphasizes identifying companies with bullish earnings consensus for potential price momentum.

Analysis

American Express (AXP) has demonstrated significant price appreciation, with its shares rising 110.3% to $341.67 since being added to the Zacks Focus List at $162.47 in December 2021. The bullish case is supported by a projected 14.3% earnings growth for the current fiscal year and a consistent history of positive earnings surprises, averaging 4.6%. Analyst sentiment for the longer term remains positive, as evidenced by three upward earnings estimate revisions for fiscal 2025 in the last 60 days, which nudged the consensus estimate up by $0.02 to $15.26. The company's unique closed-loop network is cited as a key differentiator from peers like Visa and Mastercard, enabling superior customer data and loyalty. However, a critical counterpoint is that AXP currently holds a Zacks Rank of #3 (Hold), which indicates that the powerful earnings estimate momentum that drove its initial selection may have moderated, suggesting a more neutral near-term outlook despite the strong long-term fundamentals.

Key Decisions for Investors

• Investors who have held AXP since its 2021 inclusion on the Focus List should note the 110.3% gain and the current #3 (Hold) rating, which may signal a prudent time to trim positions and realize profits.
• Potential new investors should interpret the 'Hold' rating as a sign of a less compelling near-term entry point and may consider waiting for a pullback or a ratings upgrade before initiating a long position.
• Monitor future earnings reports to ensure the company meets its 14.3% growth forecast for the current fiscal year, as sustained earnings momentum is the core of the presented investment thesis.