Summary of Stablecoin Discussion in Earnings Calls Industry Overview - The discussion revolves around the payments ecosystem, particularly focusing on stablecoins and their applications in cross-border transactions, internal treasury management, and domestic payments [1][7][32]. Key Points on Stablecoins 1. Primary Use Cases - **Cross-Border Payments**: Management teams view cross-border transactions as the primary use case for stablecoins, particularly in select geographies [1][3]. - **Internal Treasury Management**: Companies are leveraging stablecoins to enhance internal treasury operations and reduce costs [5][27]. - **Domestic Payments**: There is skepticism regarding stablecoins' effectiveness in domestic consumer payments, with many believing they do not address consumer needs [2][20]. 2. Company-Specific Insights - **Mastercard (MA)**: Emphasizes that stablecoins do not currently provide a compelling value proposition for regular P2M payments, likening them to prepaid cards [4][26]. However, they are expanding options for cross-border transactions and remittances [18]. - **American Express (AXP)**: Expresses doubt about stablecoins replacing existing payment methods, citing the benefits of current systems like rewards and dispute resolution [23][54]. - **Visa (V)**: Highlights the deployment of stablecoin-linked cards and the potential for faster cross-border transactions, particularly in emerging markets [21][35]. - **PayPal (PYPL)**: Introduces PYUSD, a stablecoin aimed at addressing high fees and slow cross-border transfers, with a focus on real-world applications [45][49]. 3. Partnerships and Collaborations - Numerous partnerships have been announced to integrate stablecoin functionalities, such as: - **PAYO x Citi**: Leveraging Citi's Token Services for global liquidity [6]. - **CPAY x Circle**: Integrating USDC wallets into CPAY's platform [6]. - **RELY x Bridge**: Enabling stablecoin disbursements in select markets [6]. - These partnerships aim to enhance treasury efficiency and facilitate the movement of funds across different currencies [11][30]. 4. Challenges and Considerations - **FX Conversion Needs**: While stablecoins offer time and cost savings in certain corridors, there remains a need for effective foreign exchange conversion solutions [3][15]. - **Consumer Adoption**: The lack of consumer demand for stablecoins in domestic payments is a significant barrier, with many companies noting that existing payment methods are sufficient [2][24][25]. - **Infrastructure and Compliance**: Companies emphasize the importance of robust infrastructure and regulatory compliance to facilitate stablecoin transactions [42][54]. 5. Future Outlook - The consensus among industry players is that while stablecoins present opportunities, they are unlikely to replace existing payment systems. Instead, they will serve as complementary tools, particularly in cross-border transactions and treasury management [54][19][51]. Additional Insights - The integration of stablecoins into existing payment systems is seen as a way to enhance efficiency and reduce costs, particularly for businesses operating in multiple currencies [29][40]. - Companies are actively exploring the potential of stablecoins to address the needs of customers in inflationary economies, providing them with a less volatile currency option [53][54]. This summary encapsulates the key discussions and insights from the earnings calls regarding stablecoins, highlighting their potential applications, challenges, and the evolving landscape of the payments industry.

Core Insights - Investors are comparing Inter & Co. Inc. (INTR) and American Express (AXP) to determine which stock offers better value [1] - The Zacks Rank system is used to identify strong value stocks, emphasizing companies with positive earnings estimate revisions [2] Valuation Metrics - INTR has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to AXP, which has a Zacks Rank of 3 (Hold) [3] - Key valuation metrics for INTR include a forward P/E ratio of 15.47 and a PEG ratio of 0.42, while AXP has a forward P/E of 21.40 and a PEG ratio of 1.73 [5] - INTR's P/B ratio is 2.28, significantly lower than AXP's P/B of 7.04, contributing to INTR's Value grade of A compared to AXP's Value grade of C [6] Earnings Outlook - INTR is noted for its improving earnings outlook, which enhances its attractiveness as a value investment [7]

Core Insights - The payments industry is highly sensitive to consumer spending shifts, raising concerns about which companies can maintain earnings momentum amid cooling demand [1][2] Economic Context - U.S. consumer spending growth was 1.4% in Q2, an improvement from 0.5% in Q1 but significantly lower than 2.8% in 2024, marking the fifth-slowest rate since Q3 2021 [2] - Factors such as tariffs, inflation, and softer job growth are negatively impacting consumer sentiment, leading to more cautious spending behavior [2] Company Comparisons - Visa Inc. and American Express Company are highlighted as key players in the payments sector, with differing business models and customer bases that may affect their performance during a slowdown [3] - Visa's diversified customer base and lower credit risk position it favorably compared to AmEx, which relies heavily on U.S. premium cardholders and lending income [4][5] Visa's Strengths - Visa's payments volume increased by 8% year over year, with cross-border activity up 12%, indicating resilience against domestic spending weaknesses [4][6] - Visa's operational model reduces credit risk exposure, with a long-term debt-to-capital ratio of 33.6%, significantly lower than AmEx's 64.3% [5] - Investments in e-commerce and digital payment technologies enhance Visa's adaptability and relevance in the payments ecosystem [7] American Express's Position - AmEx's premium cardholder base leads to higher average spending, with a 9% year-over-year revenue increase in the latest quarter [8][9] - However, AmEx's reliance on transaction fees and lending income exposes it to higher credit risk, with rising provisions for credit losses noted [10] - AmEx's U.S.-centric model makes it more vulnerable to domestic spending downturns compared to Visa's global reach [11] Financial Performance and Valuation - Visa's fiscal 2025 earnings estimates show 11 upward revisions, with expected sales and EPS growth of 10.9% and 13.7% respectively [13] - In contrast, AmEx's estimates reflect one upward and one downward revision, with projected sales and EPS growth of 8.3% and 14.3% [14] - Visa trades at a forward earnings multiple of 27.46X, while AmEx trades at 19X, reflecting Visa's stronger earnings visibility and lower credit risk exposure [15] Market Performance - Year-to-date, Visa shares have increased by 10.4%, outperforming the broader industry and S&P 500, while AmEx shares are up 6.4% [18] Conclusion - Both Visa and American Express are key players in the payments industry, but Visa's diversified model, lower credit risk, and strong market performance position it better to withstand potential consumer spending slowdowns [21][22]

Core Insights - American Express and the National Trust for Historic Preservation announced the 2025 class of grantees for the Backing Historic Small Restaurants program, celebrating five years of support for small, independent restaurants across the U.S. [1][3] - A total of 50 restaurants will each receive a $50,000 grant to assist in renovations and business growth, alongside waived service fees for one year from Resy, an American Express company [2][4]. Funding and Impact - Since its inception in 2020, the program has awarded over $8 million to 180 restaurants in all 50 states, Washington, D.C., Puerto Rico, and the Virgin Islands, helping them restore, expand, and innovate [3][4]. - The initiative aims to create lasting impacts on communities by preserving cultural and culinary landmarks that connect generations through food [3][11]. Broader Initiatives - The Backing Historic Small Restaurants program is part of a larger effort by American Express to support small businesses, which includes the Backing International Small Restaurants initiative, expanding to France, Spain, and New Zealand in 2025 [4][5]. - Together, these programs plan to provide nearly $4 million in funding and resources to 150 restaurants globally in 2025 [4]. Company Commitment - American Express has a long-standing commitment to supporting small businesses, exemplified by initiatives like Shop Small and Small Business Saturday, which is now in its 16th year [5][8]. - The company operates platforms like Resy and Tock, serving over 27,000 restaurants and hospitality venues across the U.S., further enhancing its support for the dining industry [5][8].

Core Viewpoint - American Express is a strong player in the credit card industry with significant brand recognition and a closed-loop payments platform that enhances its network effect [1][4][7] Group 1: Investment Performance - American Express shares have generated a total return of 237% over the past five years, indicating strong performance but falling short of the 400% target [4] - A hypothetical fivefold increase in shares over the next five years would yield a 38% annualized return, outperforming the broader market [4] - The company is not expected to achieve a $10,000 to $50,000 investment growth by 2030, as management anticipates earnings per share growth at a mid-teens percentage pace [5][6] Group 2: Long-term Outlook - Investors extending their time horizon may see a potential 400% return over a 15- to 20-year period, despite short-term growth limitations [6] - The stock is currently trading at a historically high price-to-earnings ratio of 21.6, which may hinder achieving better returns [7] Group 3: Company Strengths - American Express benefits from a strong brand and network effect, supported by significant investment from Berkshire Hathaway, which owns 21.8% of the outstanding shares [1][7] - The company is recognized as an outstanding business, meriting a place on investors' watch lists [7]

Core Viewpoint - Incorporating top stocks from various sectors can effectively balance an investment portfolio, with the Global Industry Classification Standard aiding in sector comparison and market tracking [1][2]. Sector Summaries 1. Technology - The technology sector comprises over a third of the S&P 500, with a 34% weighting, including major companies like Nvidia, Microsoft, and Apple. Texas Instruments is highlighted as a top tech stock for 2025 due to its diversified business and 2.7% dividend yield [5][6]. 2. Financials - Financials represent the second-largest sector at 13.8% of the S&P 500. American Express is noted for its dual role as a payment processor and card issuer, maintaining a low net write-off rate, indicating strong risk management [7]. 3. Consumer Discretionary - This sector accounts for 10.4% of the S&P 500 and is sensitive to economic conditions. Starbucks is identified as a top pick due to its successful turnaround and 2.7% dividend yield, supported by leadership changes [8][9]. 4. Communications - The communications sector makes up 9.9% of the S&P 500. Alphabet is recommended for its diverse business model and low valuation, with continued growth in Google Search and accelerating adoption of its chatbot, Google Gemini [10]. 5. Healthcare - Healthcare constitutes 8.8% of the S&P 500, facing pressure from sell-offs. Eli Lilly is recognized for its promising drug pipeline and growing dividend, appealing to investors [11]. 6. Industrials - The industrials sector has an 8.6% weighting in the S&P 500. Honeywell International is noted for its plan to split into three businesses to enhance shareholder value, with a 2.1% dividend yield [12]. 7. Consumer Staples - Consumer staples represent 5.2% of the S&P 500 and are currently challenged by inflation. Procter & Gamble is highlighted for its strong pricing power and 2.7% dividend yield, having increased payouts for 69 consecutive years [13]. 8. Energy - The energy sector is under pressure from low oil prices and the energy transition. ExxonMobil is recommended for its low production costs and diversified portfolio, boasting a 3.7% dividend yield and 42 years of increasing payouts [15][16]. 9. Utilities - Utilities make up 2.5% of the S&P 500 and are known for reliable passive income. Southern Company is noted for its high demand and 3.1% yield, making it a strong investment choice [17]. 10. Real Estate - The real estate sector accounts for 2% of the S&P 500, including REITs. Mid-America Apartment Communities is highlighted for its strong dividend history, with a yield of 4.3% [19]. 11. Materials - The materials sector comprises 1.8% of the S&P 500. Sherwin-Williams is recognized for its long history of dividend increases and stock repurchases, yielding 0.9% [20][22].

Core Insights - American Express Company (AXP) is enhancing its global sports and entertainment portfolio through new partnerships, including collaborations with Hard Rock Stadium, the Formula 1 Crypto.com Miami Grand Prix, and the Miami Dolphins as their official payments partner [1][9]. Partnerships and Benefits - Eligible AmEx cardholders will receive exclusive benefits such as Amex Presale Tickets, access to VIP lounges, and a special entrance, aiming to create a unique space where sports, culture, and premium experiences converge [2][9]. - The sponsorship of the Formula 1 Crypto.com Miami Grand Prix supports AXP's expansion plans into over 20 global races by 2025, focusing on immersive fan experiences and card member benefits like AmEx Race Radios [3][9]. Market Position and Performance - AXP's sports portfolio is robust, featuring significant sponsorships in various sports, with Miami being a strategic location due to Hard Rock Stadium's role as the home of the Dolphins and a venue for major events [4][9]. - In 2023, AXP's network volume was approximately $1.7 billion, reflecting a 5% year-over-year increase in 2024, followed by a 6% rise in the first half of 2025, indicating resilience in travel and entertainment spending [5]. Competitive Landscape - Competitors like Mastercard and Visa are also active in the entertainment sector, with Mastercard's purchase transactions increasing by 9.6% year-over-year in the first half of 2025, while Visa's payments volume rose by 8% year-over-year in Q3 of fiscal 2025 [6][7]. Financial Metrics - AXP shares have increased by 3.9% year-to-date, outperforming the industry growth of 1.8% [8]. - The company trades at a forward price-to-earnings ratio of 18.56X, lower than the industry average of 20.17, and has a Value Score of B [10]. - The Zacks Consensus Estimate for AXP's 2025 earnings is $15.26 per share, representing a 14.3% increase from the previous year [11].

[Music] And we are back on halftime with our final trades. Brenn Talkington, you're up first. >> Let's let's roll a sales force.Like the technicals here. The market gets it wrong all the time. AI is going to make this company stickier and stickier.>> Carrie, >> I like that trade. Brent, I'm giving you American Express. AXP.It seems to be hitting an inflection point on the stock. It's well below the market multiple. >> This is the shock.Boston based company right there. >> Boston based company. >> Yeah.Right ...

Core Insights - American Express Company (AXP) has outperformed the S&P 500 and broader industry with a 24.3% gain over the past year, although it lagged behind larger peers Visa Inc. (27.7%) and Mastercard Incorporated (25.1%) [1][5] - The company's strong brand and affluent customer base have provided resilience against macroeconomic volatility, maintaining its reputation as a quality investment [2][21] - AXP currently trades below the Wall Street average price target of $321.38, indicating a limited upside of 4.7% from current levels [3][5] Financial Performance - AXP's forward P/E ratio stands at 18.43X, which is below the industry average of 20.56X but above its five-year median of 17.03X, suggesting it may be slightly overvalued historically [8][9] - The company reported a second-quarter interest income of $6.3 billion, reflecting an 8% year-over-year increase, supported by its unique business model as both a card issuer and a bank [12] - Network volumes rose 7% to $472 billion in the second quarter, driven by resilient consumer spending among its affluent customer base [13] Balance Sheet Strength - AXP holds $57.9 billion in cash and cash equivalents with only $1.5 billion in short-term borrowing, indicating a strong balance sheet [14] - The total assets increased to $295.6 billion from $271.5 billion at the end of 2024, with a net debt-to-capital ratio of 1.91%, significantly lower than the industry average of 16.11% [14] Growth Estimates - Analysts project a 14.3% year-over-year increase in AXP's earnings for 2025, with 2026 earnings expected to grow by 13.7% [16] - Revenue estimates for 2025 and 2026 indicate growth of 8.3% and 8.1%, respectively, with a solid track record of surpassing earnings expectations [16][17] Risks and Challenges - AXP is more exposed to travel and entertainment spending, which can decline sharply during economic downturns, making it vulnerable despite its affluent customer base [18][22] - Rising operating costs have been a concern, with expenses increasing significantly over the past few years, which could pressure margins [19] - The company's domestic focus compared to Visa and Mastercard's global expansion may limit its adaptability to emerging payment trends [20][22]

Core Insights - American Express Company (AXP) is adapting to the Buy Now Pay Later (BNPL) trend by integrating it into its existing card services rather than resisting it [1][4] - The company's 'Plan It' feature allows cardholders to split purchases of $100 or more into manageable monthly payments, enhancing the cardholder experience with rewards and benefits [2][8] - American Express is collaborating with various companies to strengthen its presence in the digital shopping landscape, showcasing that traditional financial institutions can innovate and grow within the BNPL space [3][4] Financial Performance - American Express achieved a 98% spend retention rate, with network volume increasing by 7% year over year in Q2 2025, indicating strong customer loyalty and growth [4][8] - The forward price-to-earnings ratio for American Express is 18.4X, which is lower than the industry average of 20.6, suggesting a potentially attractive valuation [10] - The Zacks Consensus Estimate for American Express' 2025 earnings is projected at $15.26 per share, reflecting a 14.3% increase from the previous year [11] Competitive Landscape - Competitors in the BNPL space include PayPal Holdings, which reported a 6% year-over-year growth in total payment volume and a 2% increase in active accounts to 438 million in Q2 2025 [5] - Affirm Holdings is focusing on higher-ticket purchases and reported a 23% year-over-year increase in active consumers, along with a 36% growth in gross merchandise volume in Q3 2025 [6]