Earnings Growth & Price Strength Make American Express (AXP) a Stock to Watch

Zacks highlights its Focus List, an investment strategy driven by earnings estimate revisions, which has significantly outperformed the S&P 500, delivering a cumulative return of 2,519.23% since 1996 versus 854.95%. American Express (AXP) is presented as a successful case study, with its shares surging 83.78% since its December 2021 inclusion in the Focus List. This strong performance is supported by recent upward revisions to its fiscal 2025 earnings estimates, a projected 13.9% earnings growth for the current fiscal year, and a historical average earnings surprise of 5.2%.

Analysis

American Express (AXP) is highlighted as a case study for an investment thesis centered on positive earnings estimate revisions, having delivered a significant 83.78% price increase since its addition to the Zacks Focus List in December 2021. The stock's forward-looking prospects appear solid, supported by a projected 13.9% earnings growth for the current fiscal year and a historical tendency to outperform expectations, evidenced by an average earnings surprise of 5.2%. Analyst sentiment for the longer term shows positive signals, with three analysts revising their fiscal 2025 earnings estimates upward within the last 60 days. However, these recent upward revisions have not moved the Zacks Consensus Estimate of $15.21, implying they were either minor in magnitude or counteracted by other factors. Critically, the stock is currently rated a #3 (Hold), which contrasts with the 'Strong Buy' or 'Buy' criteria for initial inclusion on the Focus List, suggesting that while the long-term fundamentals that led to its selection remain, its valuation may now fully reflect this outlook or near-term catalysts have moderated.

Key Decisions for Investors

• Investors who have held AXP since its addition to the Focus List should consider the stock's 83.78% appreciation and its current 'Hold' rating as a potential signal to re-evaluate their position or trim exposure to lock in gains.
• For those considering a new position, the strong projected earnings growth of 13.9% is a positive indicator, but the neutral 'Hold' rating and stagnant consensus estimate for fiscal 2025 suggest waiting for a more compelling entry point or a positive shift in overall analyst consensus.
• Monitor future analyst estimate revisions closely, as a broader upward trend in the fiscal 2025 consensus estimate would be a key catalyst and could validate the bullish thesis for further price momentum.