American Express Analysts Break Down Credit Trends, Future Revenue Surge

Core Viewpoint - American Express reported mixed fiscal 2024 second-quarter results, with an EPS beat driven by a lower provision, while Pre-provision Net Revenue (PPNR) was in line with expectations [2][3]. Financial Performance - The second quarter showed slower revenue growth, with the likelihood that revenue could end at the low end of guidance, leading to underperformance in shares [3][4]. - The company intends to invest $6 billion in marketing this year, leveraging better credit results to position for revenue growth into 2025 [5]. Outlook and Projections - Analysts expect revenue growth to come in towards the lower end of expectations, but anticipate a re-acceleration in card fees and improvement in small businesses [4][5]. - Core EPS estimates for fiscal 2024, 2025, and 2026 have been revised to $13.80, $15.00, and $17.45, respectively [6]. Analyst Ratings - Goldman Sachs analyst maintained a Buy rating and raised the price target from $263 to $270, while RBC Capital Markets analyst maintained an Outperform rating and raised the price target from $265 to $267 [2][6]. - Analysts express optimism about the long-term mid-teens EPS growth being achievable and sustainable, even in a slower revenue environment [7][8].