Shares of American Express (NYSE:AXP) got a boost in trading on Friday as the payment processing company reported strong Q1 results. AXP posted earnings of $3.33 per diluted share, marking a robust 39% year-over-year increase and surpassing Street estimates of $2.96 per share.
The company’s revenues increased by 11% year-over-year to $15.8 billion, aligning with consensus estimates. AXP’s revenues received a boost as spending by card members grew by 7% in Q1, adjusting for currency exchange fluctuations.
Moreover, the company continues to see Gen Z (people born between 1997 and 2012) and millennials comprising 60% of its new customer accounts globally. This is positive news for AXP, as it indicates that younger demographics, who are often considered the future of consumer spending, are increasingly choosing to become customers of the company.
Looking forward, American Express reiterated its guidance for FY24 and expects revenues to grow in the range of 9% to 11% while earnings are likely to be in the range of $12.65 to $13.15 per share.
Is AXP a Buy or Sell?
Analysts are cautiously optimistic about AXP stock, with a Moderate Buy consensus rating based on eight Buys and Holds each and three Sells. Year-to-date, AXP has surged by more than 15%, and the average AXP price target of $222 implies a downside potential of 1.4% from current levels. These analyst ratings will likely change today after AXP’s Q1 results.
