The three best-performing sectors last year were communication services, information technology and consumer discretionary. Although the growth of artificial intelligence (AI) stocks grabbed all the headlines and many companies came near 52-week highs because of their relation to the technology, a business didn’t need to be plugged into AI to win.There are plenty of growth stocks near 52-week highs that had little to do with AI, machine learning, or large language models. They got ahead because of good busi ...

With the economy poised to potentially tap the brakes for U.S. consumers, JPMorgan Chase analyst Richard B. Shane upgraded American Express Co. to overweight from neutral on Friday.American Express Co.’s AXP more affluent customer base may offer investors a “haven from deteriorating household balance sheets” as lower- and middle-income borrowers face pressure from depleted savings from the pandemic and the lingering effects of high inflation, Shane said.The company’s stock rose by 0.7% in premarket trading ...

American Express (AXP) closed the most recent trading day at $186.32, moving -1.06% from the previous trading session. The stock fell short of the S&P 500, which registered a loss of 0.8% for the day. At the same time, the Dow lost 0.76%, and the tech-heavy Nasdaq lost 1.18%.The credit card issuer and global payments company's stock has climbed by 10.33% in the past month, exceeding the Finance sector's gain of 5.42% and the S&P 500's gain of 3.4%.The investment community will be paying close attention to t ...

Nothing seems to be able to stop American Express (AXP -0.24%) from delivering robust growth for shareholders -- not an uncertain economy, pressured consumers, tough year-ago comparisons, or even a skittish October. Indeed, management recently reiterated a view it first provided last January for 15% to 17% year-over-year revenue growth in 2023. Even more, Amex continues to stick to its aggressive long-term target for annualized average revenue growth of 10% or greater and earnings-per-share growth in the mi ...

It took almost two years to get here, but the Dow Jones Industrial Average is officially in a bull market. The collection of stocks is way up from its recent lows, and it reached a new all-time high in late December.The Dow Jones Industrial Average may be way up, but some of its components didn't get the memo. These two stocks are trading at what appears to be bargain prices. The most richly valued of the pair is trading for just 11.6 times trailing free cash flow. These well-established businesses probably ...

American Express Company (NYSE:AXP) Goldman Sachs 2023 US Financial Services Conference December 5, 2023 11:20 AM ET Company Participants Stephen Squeri - Chairman and Chief Executive Officer Conference Call Participants Ryan Nash - Goldman Sachs Ryan Nash All right. We're going to get started here. Up next, we are excited to have American Express joining us once again. American Express has continued to deliver best-in-class top line growth through a differentiated customer acquisition strategy, leveraging ...

Revenue Growth - Total revenues net of interest expense increased by 13% year-over-year to $15.381 billion for Q3 2023, driven by growth in billed business and net card fees[12][16] - Total revenues net of interest expense increased by $1.825 billion (13%) for the three-month period and $6.030 billion (16%) for the nine-month period, driven by growth in discount revenue and net card fees[22][23] - Total revenues net of interest expense increased to $15.381 billion in Q3 2023, up from $13.556 billion in Q3 2022[134] - Total revenues net of interest expense increased to $44,716 million in 2023 from $38,686 million in 2022, reflecting a growth of 15.6%[137] Net Income and Earnings - Net income for Q3 2023 was $2.451 billion, a 30% increase compared to $1.879 billion in Q3 2022[12] - Earnings per diluted share increased by 34% year-over-year to $3.30 in Q3 2023[12] - Net income rose to $2.451 billion in Q3 2023, compared to $1.879 billion in Q3 2022[134] - Net income rose to $6,441 million in 2023 compared to $5,942 million in 2022, marking an 8.4% increase[137] - Net income for the nine months ended September 30, 2023, was $6,441 million, compared to $5,942 million in the same period in 2022[144] - Net income for the three months ended September 30, 2022 was $1,879 million[150] - Net income for the nine months ended September 30, 2022 was $5,942 million[150] Card Member Spending and Billed Business - Worldwide network volumes increased by 7% year-over-year to $420.2 billion in Q3 2023, with billed business growing 8%[16] - Travel & Entertainment (T&E) spend grew by 13% year-over-year, reflecting strong demand for travel and dining experiences[16] - U.S. Consumer Services billed business grew by 9% year-over-year, with significant growth from Millennial and Gen-Z Card Members[16] - International Card Services billed business grew by 18% year-over-year (15% FX-adjusted), driven by consumer and commercial spending outside the U.S.[16] - Billed business grew by 8% to $366.2 billion for the three months ended September 2023 compared to $339.0 billion in 2022[35] - International Card Services saw an 18% increase in billed business for the three months ended September 2023[36] - Billed business increased by 9% to $153.5 billion for the three months ended September 2023 compared to $140.3 billion in 2022, and by 12% to $451.1 billion for the nine months ended September 2023 compared to $404.1 billion in 2022[52] - Billed business increased by 1% to $129.5 billion for the three months ended September 2023 compared to $127.6 billion in 2022, and by 4% to $384.7 billion for the nine months ended September 2023 compared to $369.0 billion in 2022[62] - Billed business increased by 18% to $82.7 billion for the three months ended September 30, 2023, compared to $70.2 billion in the same period in 2022[72] Net Interest Income and Loans - Net interest income increased by 34% year-over-year, primarily due to growth in interest-bearing loans and Card Member receivables[16] - Total loans and Card Member receivables increased by 15% year-over-year, driven by higher Card Member spending[17] - Net interest income increased by $864 million (34%) for the three-month period and $2.393 billion (34%) for the nine-month period, primarily due to higher interest rates and growth in revolving loan balances[22][24] - Card Member loans grew by 19% to $118.0 billion as of September 2023 compared to $99.0 billion in 2022[38] - Net interest income for the three months ended September 30, 2023, was $3.442 billion, compared to $2.578 billion in the same period in 2022, representing a 33.5% increase[40] - Adjusted net interest income for the three months ended September 30, 2023, was $3.445 billion, compared to $2.652 billion in the same period in 2022, reflecting a 29.9% increase[40] - Average Card Member loans for the three months ended September 30, 2023, were $116.6 billion, up from $97.7 billion in the same period in 2022, a 19.3% increase[40] - Net interest income increased to $2.528 billion for the three months ended September 2023 compared to $1.977 billion in 2022, and to $7.039 billion for the nine months ended September 2023 compared to $5.366 billion in 2022[52] - Net interest income for International Card Services increased by 36% to $253 million for the three months ended September 2023 compared to $186 million in 2022, and by 24% to $732 million for the nine months ended September 2023 compared to $590 million in 2022[64] - Card Member loans increased from $107,964 million as of December 31, 2022 to $117,978 million as of September 30, 2023[158] - Consumer Card Member loans increased from $84,964 million as of December 31, 2022 to $90,900 million as of September 30, 2023[158] - Small Business Card Member loans increased from $22,947 million as of December 31, 2022 to $27,022 million as of September 30, 2023[158] Credit Losses and Provisions - Provisions for credit losses increased by 58% year-over-year to $1.233 billion in Q3 2023, primarily due to higher net write-offs[12][17] - Provisions for credit losses increased by $455 million (58%) for the three-month period and $2.331 billion (202%) for the nine-month period, driven by higher net write-offs and reserve builds[26][27][28] - Net write-off rate for principal, interest, and fees increased to 2.0% for the three months ended September 2023 compared to 1.0% in 2022[38] - Credit loss reserves ending balance increased by 42% to $4,721 million as of September 2023 compared to $3,319 million in 2022[38] - Provisions for credit losses for the three months ended September 30, 2023, were $752 million, up 87% from $403 million in the same period in 2022[43] - Provisions for credit losses increased by 65% to $323 million for the three months ended September 2023 compared to $196 million in 2022, and by a significant margin to $945 million for the nine months ended September 2023 compared to $294 million in 2022[54] - Provisions for credit losses surged to $3,486 million in 2023 from $1,155 million in 2022, a 201.8% increase[137] - Provisions for credit losses for the nine months ended September 30, 2023, were $3,486 million, up from $1,155 million in 2022[144] - Reserves for credit losses on Card Member loans increased from $3,747 million as of December 31, 2022 to $4,721 million as of September 30, 2023[158] - Provisions for credit losses were $206 million for the three months ended September 30, 2023, compared to $165 million for the same period in 2022[203] - Net write-offs were $241 million for the three months ended September 30, 2023, compared to $122 million for the same period in 2022[203] - Ending balance of Card Member receivables reserve for credit losses was $174 million for the three months ended September 30, 2023, compared to $159 million for the same period in 2022[203] Operating Expenses and Costs - Operating expenses increased by $729 million (7%) for the three-month period and $3.412 billion (11%) for the nine-month period, primarily due to higher compensation and technology costs[30][32] - Salaries and employee benefits expense increased by $299 million (17%) for the three-month period and $718 million (14%) for the nine-month period, reflecting higher compensation costs and an increase in the colleague base[30][32] - Total expenses increased by 2% to $2.572 billion for the three months ended September 2023 compared to $2.526 billion in 2022, and by 6% to $7.828 billion for the nine months ended September 2023 compared to $7.385 billion in 2022[54] - Total expenses increased to $33,229 million in 2023 from $29,817 million in 2022, reflecting an 11.4% growth[137] - Total expenses for International Card Services increased by 10% to $2.102 billion for the three months ended September 2023 compared to $1.910 billion in 2022, and by 12% to $6.376 billion for the nine months ended September 2023 compared to $5.688 billion in 2022[64] Capital and Liquidity Management - The company returned $1.7 billion of capital to shareholders through share repurchases and common stock dividends during the third quarter[19] - The company aims to maintain a Common Equity Tier 1 (CET1) risk-based capital ratio within a 10 to 11 percent target range[79] - The company manages its balance sheet to maintain liquidity programs that enable it to meet future financing obligations for at least a twelve-month period[78] - American Express Company's Common Equity Tier 1 (CET1) capital ratio as of September 30, 2023, was 10.7%, significantly above the effective minimum requirement of 7.0%[84] - American Express National Bank (AENB) reported a CET1 capital ratio of 11.4% as of September 30, 2023, also exceeding the minimum requirement[84] - Total risk-weighted assets for American Express Company stood at $209.4 billion as of September 30, 2023[85] - American Express Company returned $1.7 billion to shareholders in Q3 2023, including $0.4 billion in common stock dividends and $1.3 billion in share repurchases[90] - Customer deposits increased to $124.4 billion as of September 30, 2023, up from $110.2 billion at the end of 2022[94] - American Express Company issued $11.0 billion of debt in the first nine months of 2023, including $7.5 billion in unsecured debt and $3.5 billion in asset-backed securities[95] - Approximately 92% of deposits in AENB were FDIC-insured as of September 30, 2023, with a total of 2.2 million accounts in the direct retail deposit program[100] - Cash and cash equivalents increased to $43.9 billion as of September 30, 2023, compared to $33.9 billion at the end of 2022[102] - As of September 30, 2023, the company maintained committed, revolving, secured borrowing facilities allowing the sale of up to $3.0 billion face amount of eligible AAA notes from American Express Issuance Trust II and $3.0 billion face amount of eligible AAA certificates from American Express Credit Account Master Trust[103] - The company extended the Charge Trust's facility to mature on July 15, 2026, and increased the maximum face amount of eligible AAA certificates from $2.0 billion to $3.0 billion[103] - As of September 30, 2023, the company had a committed syndicated bank credit facility of $3.5 billion, with a maturity date of October 15, 2024[104] - As of September 30, 2023, AENB had available borrowing capacity of $67.3 billion through the Federal Reserve discount window and approximately $1.0 billion in U.S. Treasuries, agency debt, and mortgage-backed securities that could be pledged through the BTFP[105] - As of September 30, 2023, the company had approximately $377 billion of unused credit outstanding, primarily available to customers as part of established lending product agreements[106] - In 2023, the net cash provided by operating activities was $11.8 billion, driven by cash generated from net income and higher net operating liabilities[107][108] - In 2023, the net cash used in investing activities was $16.3 billion, primarily driven by higher Card Member loans and receivables outstanding[107][110] - In 2023, the net cash provided by financing activities was $14.3 billion, primarily driven by growth in customer deposits and net proceeds from debt[107][111] - Total shareholders' equity as of September 30, 2023, was $27,324 million, compared to $24,711 million at the end of 2022[147] - Repurchase of common shares for the nine months ended September 30, 2023, amounted to $2,611 million[147] - Cash dividends declared for common shares for the nine months ended September 30, 2023, totaled $1,334 million[147] - Net increase in Card Member loans and receivables, and other loans for the nine months ended September 30, 2023, was $15,462 million, compared to $19,431 million in 2022[144] Regulatory and Compliance - The company is subject to a proposed Basel III rule that could significantly revise U.S. regulatory capital requirements, with potential impacts on risk-weighted assets and capital ratios[114] - The company is required to comply with a CFPB rule by October 1, 2024, to collect and report data regarding certain small business credit applications[116] - The company is subject to stringent AML/CFT regulations, including the Bank Secrecy Act and the Anti-Money Laundering Act of 2020, which require enhanced reporting and recordkeeping[122] - Non-compliance with AML/CFT laws could result in significant penalties, loss of licenses, or restrictions on business activities[123] Card Member Metrics - Cards-in-force increased by 5% to 138.2 million as of September 2023 compared to 131.4 million in 2022[35] - Average proprietary basic Card Member spending rose by 5% to $61.2 for the three months ended September 2023 compared to $58.2 in 2022[35] - Proprietary cards-in-force grew by 5% to 43.4 million as of September 2023 compared to 41.2 million in 2022[52] - Proprietary cards-in-force grew by 5% to 20.8 million as of September 30, 2023, compared to 19.8 million in 2022[72] Investment and Securities - Investment securities include available-for-sale debt securities carried at fair value, with accrued interest totaling $12 million as of September 30, 2023[206] - Unrealized losses attributable to credit deterioration are recorded in the Consolidated Statements of Income in Other loans Provision for credit losses[206] - Unrealized gains and any portion of a security's unrealized loss attributable to non-credit losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax[206] - Equity securities carried at fair value have unrealized gains and losses recorded in the Consolidated Statements of Income as Other, net expense[206] Economic and Market Conditions - U.S. unemployment rate projections for the fourth quarter of 2023 range from 3% to 8%, with GDP growth projections ranging from 4% to -3%[196] - The CECL methodology requires estimating lifetime expected credit losses, incorporating historical loss experience and future economic conditions over a reasonable and supportable period[187] Modified Loans and Receivables - Consumer card member loans modified under financial difficulty programs totaled $542 million, representing 0.6% of total class of financing receivables[172] - Small business card member loans modified under financial difficulty programs amounted to $167 million, representing 0.6% of total class of financing receivables[172] - Total modified loans and receivables for borrowers experiencing financial difficulty reached $2,320 million for the nine months ended September 30, 2023[172] - Card Member Loans modified as TDRs totaled $546 million for the three months ended September 30, 2022, with an average interest rate reduction of 14 percentage points[182] - Card Member Receivables modified as TDRs amounted to $591 million for the nine months ended September 30, 2022, with no interest rate reduction offered[182] - Total loans and receivables modified as TDRs that subsequently defaulted within twelve months of modification aggregated $25 million for the three months ended September 30, 2022[184] Delinquencies and Write-offs - Consumer Card Member loans 90+ days past due increased from $272 million as of December 31, 2022 to $369 million as of September 30, 2023[163] - Small Business Card Member loans 90+ days past due increased from $73 million as of December 31, 2022 to $109 million as of September 30, 2023[163] - The net write-off rate for consumer card member loans was 1.7% in 2023, compared to 1.5% in 2022[168] - The net write-off rate for small business card member loans was 2.1% in 2023, compared to 1.8% in 2022[168] - Net write-off rate for principal, interest, and fees increased to 2.6% for the three months ended September 30, 2023, compared to 1.4% in 2022[72]

American Express Company (NYSE:AXP) Q3 2023 Earnings Call Transcript October 20, 2023 8:30 AM ET Company Participants Kerri Bernstein - Head of IR Steve Squeri - Chairman and CEO Christophe Le Caillec - CFO Conference Call Participants Sanjay Sakhrani - KBW Ryan Nash - Goldman Sachs Bob Napoli - William Blair Rick Shane - JPMorgan Don Fandetti - Wells Fargo Jeff Adelson - Morgan Stanley Bill Carcache - Wolfe Research Dominick Gabriele - Oppenheimer Arren Cyganovich - Citi Craig Mauer - FT Partners Mihir Bha ...

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