American Express shares have fallen almost 12% this year, trading around $326 as of July 24, despite the company continuing to operate at a high level. In the second quarter, revenue rose 10% year-over-year to $19.6 billion, missing Wall Street expectations, while diluted earnings per share of $4.53 beat analyst estimates. Management raised full-year revenue guidance to 10% growth but kept the EPS forecast unchanged, which may have disappointed investors and caused the stock to drop 7% immediately after the update. Member spending grew 9%, the fastest pace in more than three years on a currency-neutral basis, highlighting the company's strong position among affluent customers and its ability to attract millennials and Gen Zers. With a price-to-earnings ratio of 19.8, the stock is not a bargain but is considered fairly valued, and investors might still consider allocating capital given the high-quality business and secular shift toward cashless transactions.
American Express CompanyRevenue missed expectations and EPS forecast unchanged, causing stock drop.
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