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American Express Co AXP

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Weak Travel and Entertainment Spending Continues to Weigh on American Express' Recovery

Michael Miller Equity Analyst

Analyst Note

| Michael Miller |

Wide-moat American Express reported strong fourth-quarter results, with EPS of $1.76 beating the FactSet consensus estimate of $1.31. Credit costs remained low, with net principal write-offs at 1.9% of total loans. As a result, American Express was able to release more reserves, leading to a provisioning benefit of $111 million. Even with the reserve release, American Express is well provisioned and plans to resume share repurchases in 2021. Despite good credit results, American Express’ revenue generation is challenged, with declines in both discount revenue and net interest income affecting its top line. 

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Company Profile

Business Description

American Express is a global financial institution, operating in about 130 countries, that provides consumers and businesses charge and credit card payment products. The company operates a highly profitable merchant payment network. Since 2018, the company has operated in three segments: global consumer services, global commercial services, and global merchant and network services. In addition to payment products, the company's commercial business offers expense management tools, consulting services, and business loans.

200 Vesey Street
New York, NY, 10285
T +1 212 640-2000
Sector Financial Services
Industry Credit Services
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 64,500