American Express Stock Analysis $AXP -is AXP Stock a Good Buy Today | Summary and Q&A

TL;DR

American Express (AXP) is a global company that generates revenue through credit card issuance, merchant fees, and member benefits. Its stock is currently overvalued and it may take some time for the company to recover from the impact of the pandemic.

Key Insights

• 🤱 American Express's revenue mainly comes from credit card issuance and charging fees, as well as collecting merchant fees.
• 🗺️ The travel and entertainment sector, crucial for American Express, suffered greatly during the pandemic.
• 🧑‍🤝‍🧑 Analysts expect American Express's revenue to recover in the next couple of years as travel and entertainment activities resume.
• 🥳 The price-to-earnings and price-to-book ratios indicate that the stock is currently overvalued.
• 🥳 The fair value of American Express's stock, based on the long-term average price-to-book ratio, is estimated to be around $117 per share.
• 💦 The presenter suggests waiting for the stock price to drop below $117 per share before considering an investment.
• 🎮 The video recommends a process for analyzing stocks in general, with a link to a separate video for detailed steps.

Transcript

hi i'm jimmy in this video we're looking at american express ticker symbol axp this video is part of our dial 30 series where we're analyzing all 30 companies in the dow jones industrial average so we can see which companies look like they're a good company and which ones look like they're a good buy right now even in this overpriced stock market i... Read More

Questions & Answers

Q: How does American Express make money?

American Express generates revenue through credit card issuance, charging fees on cards, earning interest on balances, and collecting merchant fees.

Q: What were the main business segments of American Express in 2020?

American Express had three primary business segments in 2020: Global Consumer Services Group, Global Commercial Services, and Merchant and Network Services.

Q: How was American Express affected by the COVID-19 pandemic?

The travel and entertainment sector, a significant part of American Express's business, was severely impacted by COVID-19, leading to a sharp decline in revenue in 2020.

Q: Is American Express's stock currently overvalued?

Yes, the price-to-earnings ratio and price-to-book value ratios suggest that American Express's stock is overvalued at its current price.

Summary & Key Takeaways

• American Express has three primary business segments: Global Consumer Services Group, Global Commercial Services, and Merchant and Network Services.

• The company makes money by issuing credit cards and charging fees on them, earning interest on card balances, and collecting merchant fees.

• The travel and entertainment sector, a significant part of American Express's business, was heavily impacted by COVID-19, with revenue plummeting in 2020.