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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
American Express Company (XNYS:AXP) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AXP
Name:
AMERICAN EXPRESS COMPANY (XNYS:AXP)
Sector:
3.43B
Industry:
Credit Services
CEO:
Mr. Stephen Squeri
Total Employees:
64,000
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMERICAN EXPRESS COMPANY(AXP) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CREDIT SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
149.79
One Month Price Target:
$150.74
Six Month Price Target :
$155.5
Likely Price in One Year's Time:
Ticker:
$161.21
Likely Trading Range Today Under (Normal Volatility)
$149.16
Price Upper limit ($) :
$150.64
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$140.94
This week:
$130.01
This month :
$110.23
Other Primary facts
Market Cap:
111.41B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
749.75M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.88%
-14.82%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$190.83
$171.92
$108.75
$127.66
Medium risk (<10%) entry points
Buy Call
Sell Call
$165.77
Buy Put:
Sell Put:
$161.74
$133.76
$137.84
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AXP
Sharpe Ratio:
2.21%
Comparison:
AXP, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 18.68% higher than the industry
& is -3.20% lower than the market/S&P 500 average
Average Returns/Yield of
AXP
Daily returns:
0.07%
Weekly returns:
0.37%
Monthly returns:
1.46%
Yearly returns:
19.06%
Comparison of returns:
Average annual returns/yield (last 3 years) is -8.00% below industry average
Classification:
AXP, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.97
Statistical test of Returns:
AXP has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.91%
Weekly Volatility:
6.51%
Monthly Volatility:
13.02%
Yearly Volatility:
45.10%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.75%
Volatility in last five trading days has been -74.40% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.91%
Weekly VaR:
-13.20%
Monthly VaR:
-26.41%
How Much Can the price of
AXP
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-91.49%
This translates to price declining to:
$116.06
This translates to price declining to:
$12.75
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AXP is a 86.40% riskier investment compared to the market/S&P 500 & is 59.69% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -11.79% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AXP
Beta in relation to market/S&P 500--1.13
Expected beta in 1 year's time:
0.788
Expected beta in 3 year's time:
1.114
Unlevered (debt free) Beta:
0.492
Beta in relation to Nasdaq (XNAS):
0.953
Beta in relation to all global stocks::
1.091
Beta Comparison & Analysis
Beta of competitors/peers::
0.916
Beta is 23.76% higher than peers
Average Industry Beta:
1.332
Beta is -14.87% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
27.96%
Sustainable growth rate is -17.13% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.066
Alpha is -2.50% below industry average alpha yield
Alpha is 421% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AXP
Equity cost of capital:
0.109
Equity cost of capital is -11.05% below industry mean WACC
Unlevered (without debt) cost of capital:
4.74%
Before-tax cost of debt:
3.07%
After-tax cost of debt:
2.43%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.43%
WACC is 12.80% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$60.59
Revenue growth rate per share of (3Y):
5.02
Annual revenue growth rate is -64.08% below industry average
EPS:
$9.98
Expected Annual growth rate of EPS (3Y):
7.79%
Expected future EPS growth rate is -68.90% lower than the Credit Services industry
Free cash flow (FCF) per share:
$19.00
Balance sheet equity growth per share: 16.29%
Equity growth rate per share is -31.55% lower than the industry
Debt per share
$51.13
EBITDA per share
$17.77
Valuation Analysis Today of
AXP
P/E Ratio:
15.37
P/E Ratio of Competitors/Peers:
12.67
P/E ratio is 21.32% higher than main peers & is 26.61% higher than the industry
Stock price/value with industry average P/E ratio: $121.13
AXP is 23.66% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $34.84
Present value of the expected future dividends only: $21.97
P/S (Price to Sales ratio):
2.47
Price to sales ratio is -52.44% below the industry mean
P/B (Price to book value ratio):
5.02
Price to free cash flow: 7.88
Price to free cash flow ratio is -73.24% lower than the industry
Net income growth rate (3Y):
23.84%
Net income growth rate is 47.57% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 4.35%
Dividend yeild: 1.27%
Previous Dividend: $0.52
Previous adjusted dividend: $0.52
Previous Dividend: $1.90
Expected next dividend best case: $0.55
Expected next dividend worst case: $0.49
Average dividend payment (long-term): $0.45
Average dividend increase/decrease (growth rate) % per period: 2.09%
Expected next dividend payment date: 11/08/2022
Expected next dividend record date: 29/09/2022
-
Previous dividend payment date: 08/10/2022
Previous dividend record date: 07/01/2022
-
Dividend History:
2022-06-30--$0.52
2022-01-06--$0.43
2021-07-01--$0.43
2022-04-07--$0.52
2021-10-07--$0.43
2021-03-31--$0.43
Dividend growth rate is -121.84% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
171.28%
Net debt to equity ratio:
67.06%
Debt to assets ratio:
19.57%
Net debt to assets ratio:
7.66%
Debt-to-asset ratio is -74.89% below industry average
Ability to repay debt:
Interest coverage ratio:
10.73
Interest coverage ratio is 9.18% more than industry average
Looking forward:
Debt growth rate:
-8.73%
Annual debt growth is -118% lower than industry average debt growth rate
Debt repayment rate in last quarter: 14.25%
Analysis of Key Statistics
Correlation of price movement with the market:
0.743
Statistical significance of correlation:
AXP has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.561
Stock price is 32.52% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.561
Correlation of price movement with Nasdaq (^IXIC):
0.036
Covariance of price movement with the market:
0.06
Kurtosis
13.776
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
1.192
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AXP
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
43.89%
Operating profit margin is 50.95% higher than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
23.87%
Effective tax rate is 10.22% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
35.40%
Return on equity (ROE) is -16.50% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.05%
Return on assets (ROA) is -33.23% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
8.48
Current ratio is 46.72% above industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 11.4 years
Stock based compensation to net income ratio:
1.54%
In-depth Efficiency Analysis
Revenue generated per employee:
709.8K
Each employee generates -2% less revenue than industry average revenue per employee
EBITDA generated per employee:
208.1K
Each employee generates -50% less EBITDA than industry average revenue per employee
Profit generated per employee:
123.8K
Each employee generates -49% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
53.6K
Each employee generates -8% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -8% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AXP
BLACKROCK, INC. (XNYS:BLK)
HSBC HOLDINGS PLC (XNYS:HSBC)
THE GOLDMAN SACHS GROUP, INC. (XNYS:GS)
THE TORONTO-DOMINION BANK (XNYS:TD)
ROYAL BANK OF CANADA (XNYS:RY)
China Life Insurance Company Limited (OTCM:LFCHY)
S&P Global Inc. (XNYS:SPGI)
RY-PT
-
Current Analyst Ratings
Strong buy�25%
Buy�17%
Hold�67%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
45.42B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
6.34B
14.86B
8.51B
-
-
9.36B
1.24B
1.67B
13.32B
-
7.92B
10.41B
2.48B
7.92B
Statement of Cash Flow
Date:
Period:
398.00M
Differed Income Tax :
- 69000.00K
Stock Based Compensation :
122.00M
Change in Working Capital :
1.41B
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 80000.00K
Net Cash Provided by Operating Activities:
3.88B
Investments in PP&E:
- 447000.00K
Net Acquisitions:
-
Purchases of Investments:
- 2328000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
25.45B
1.75B
27.19B
-
-
-
-
5.05B
-
-
4.06B
-
-
-
195.86B
195.86B
11.20B
2.12B
-
-
-
13.32B
38.34B
-
38.34B
198.50B
173.48B
151.00M
13.75B
- 2973000.0K
11.45B
March 31, 2022 at 6:00:00 AM
-
22.38B
195.86B
5.80B
40.46B
15.0B
783.00M
- 785000.00K
- 2777000.00K
- 6373000.00K
49.00M
- 1570000.00K
- 345000.00K
12.77B
4.53B
14.00M
5.65B
27.68B
22.03B
3.88B
- 447000.00K
3.43B
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
AXP
2023
2024
2025
2026
2027
$176.15
$189.58
$204.03
$219.57
$236.31