AmEx (AXP) Down 2.7% on Spending Jitters: Wallets on Edge?

Core Viewpoint - American Express Company (AXP) faces challenges in a difficult spending environment, leading to a downgrade by Bank of America Securities from Buy to Neutral, with concerns over its premium valuation limiting upside potential [1] AXP Stock's Valuation - AXP's current valuation is considered expensive, trading at 17.31X forward 12-month price-to-earnings, above its five-year median of 15.73X and the industry average of 13.56X [2] Spending Environment - The slowdown in real disposable income growth is expected to constrain spending on big-ticket items and discretionary areas such as entertainment, travel, and dining, impacting AXP's short-term performance [4] - The depletion of pandemic-era excess savings is further affecting spending growth, with high-end consumer spending also facing challenges, leading to muted billings volume growth [4] AXP's Resilience Through Growth Initiatives - Despite the challenging environment, AXP's strategic initiatives, including new product launches, feature enhancements, price adjustments, and key alliances, position the company for long-term growth [5] - The Zacks Consensus Estimate for 2024 earnings is $13.06 per share, indicating a 16.5% increase year-over-year, with further growth of 14% expected in 2025 [5] - Revenue estimates for 2024 and 2025 suggest year-over-year increases of 9% and 8.7%, respectively, with AXP beating earnings estimates in three of the past four quarters [5] AXP's Price Performance - Year-to-date, AXP shares have gained 31.5%, outperforming the industry's 3.5% increase and the S&P 500 Index's 17.9% growth [6] Zacks Rank & Key Picks - AXP currently holds a Zacks Rank 3 (Hold), while other finance players like Jackson Financial Inc. (Rank 1), WisdomTree, Inc. (Rank 2), and HIVE Digital Technologies Ltd. (Rank 2) are highlighted as better-ranked options [8][9]