An American multinational financial services company, American Express (AXP), exceeded consensus with its first-quarter earnings.
American Express’ first quarter revenue for 2024 reached $15.8 billion, a 10.6% increase yearly, and net income rose by 34.2% to $2.4 billion, surpassing market expectations. The total payment amount increased by 5.1% to $419.2 billion, and the total number of issued cards maintained a similar level to the previous quarter, with a 4.9% increase to 140 million cards.
NH Investment & Securities analyst Yoon Yoo Dong stated, “Although revenue from reopening-related sales decreased, other consumption expanded,” and “thanks to the significant influx of younger generations, as the company aimed for 60% of new customers to be from the MZ generation.”
After the earnings announcement, the stock price rose 6%. Analysts believe this is due to the active new card business and the company maintaining its guidance for 2024 despite unfavorable economic conditions.
Recently, competitors Visa and Mastercard announced they would reduce merchant fees by at least four bps each after a 20-year lawsuit, causing their stock prices to drop. According to media reports, this amount is estimated to reach around $30 billion over the next five years.
Analyst Yoon Yoo Dong stated, “The company has fewer merchants compared to others, which has relatively protected its stock price from this issue,” and “If annual good performance is backed up, a continuous outperform is expected.”
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