AMERICAN EXPRESS CO (1AXP.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1AXP - US0258161092 - Common Stock
314.75 EUR
+7.65 (+2.49%)
1AXP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 8 industry peers in the Consumer Finance industry. While 1AXP has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, 1AXP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- 1AXP had positive earnings in the past year.
- In the past year 1AXP had a positive cash flow from operations.
- In the past 5 years 1AXP has always been profitable.
- Each year in the past 5 years 1AXP had a positive operating cash flow.
1.2 Ratios
- 1AXP has a Return On Assets of 3.50%. This is in the better half of the industry: 1AXP outperforms 80.00% of its industry peers.
- With an excellent Return On Equity value of 32.12%, 1AXP belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
- With a decent Return On Invested Capital value of 3.77%, 1AXP is doing good in the industry, outperforming 70.00% of the companies in the same industry.
- 1AXP had an Average Return On Invested Capital over the past 3 years of 3.64%. This is in line with the industry average of 4.67%.
- The last Return On Invested Capital (3.77%) for 1AXP is above the 3 year average (3.64%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.5% | ||
| ROE | 32.12% | ||
| ROIC | 3.77% |
ROA(3y)3.36%
ROA(5y)3.17%
ROE(3y)30.79%
ROE(5y)28.26%
ROIC(3y)3.64%
ROIC(5y)3.45%
1.3 Margins
- The Profit Margin of 1AXP (13.72%) is comparable to the rest of the industry.
- In the last couple of years the Profit Margin of 1AXP has remained more or less at the same level.
- 1AXP's Operating Margin of 17.76% is fine compared to the rest of the industry. 1AXP outperforms 80.00% of its industry peers.
- 1AXP's Operating Margin has been stable in the last couple of years.
- Looking at the Gross Margin, with a value of 61.93%, 1AXP is in line with its industry, outperforming 50.00% of the companies in the same industry.
- 1AXP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.76% | ||
| PM (TTM) | 13.72% | ||
| GM | 61.93% |
OM growth 3Y-8.78%
OM growth 5Y-0.57%
PM growth 3Y-8.37%
PM growth 5Y-0.22%
GM growth 3Y-2.58%
GM growth 5Y-1.09%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 1AXP is destroying value.
- The number of shares outstanding for 1AXP has been reduced compared to 1 year ago.
- The number of shares outstanding for 1AXP has been reduced compared to 5 years ago.
- The debt/assets ratio for 1AXP is higher compared to a year ago.
2.2 Solvency
- 1AXP has an Altman-Z score of 0.88. This is a bad value and indicates that 1AXP is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of 1AXP (0.88) is better than 80.00% of its industry peers.
- 1AXP has a debt to FCF ratio of 11.04. This is a negative value and a sign of low solvency as 1AXP would need 11.04 years to pay back of all of its debts.
- 1AXP has a Debt to FCF ratio (11.04) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 6.45 is on the high side and indicates that 1AXP has dependencies on debt financing.
- 1AXP has a Debt to Equity ratio of 6.45. This is amonst the worse of the industry: 1AXP underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.45 | ||
| Debt/FCF | 11.04 | ||
| Altman-Z | 0.88 |
ROIC/WACC0.52
WACC7.21%
2.3 Liquidity
- 1AXP has a Current Ratio of 0.68. This is a bad value and indicates that 1AXP is not financially healthy enough and could expect problems in meeting its short term obligations.
- 1AXP has a Current ratio of 0.68. This is in the lower half of the industry: 1AXP underperforms 60.00% of its industry peers.
- 1AXP has a Quick Ratio of 0.68. This is a bad value and indicates that 1AXP is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of 1AXP (0.68) is worse than 60.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.68 |
3. Growth
3.1 Past
- 1AXP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 15.24%, which is quite good.
- 1AXP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.27% yearly.
- The Revenue has been growing slightly by 4.37% in the past year.
- Measured over the past years, 1AXP shows a quite strong growth in Revenue. The Revenue has been growing by 8.79% on average per year.
EPS 1Y (TTM)15.24%
EPS 3Y10.15%
EPS 5Y10.27%
EPS Q2Q%18.62%
Revenue 1Y (TTM)4.37%
Revenue growth 3Y17.95%
Revenue growth 5Y8.79%
Sales Q2Q%10.76%
3.2 Future
- Based on estimates for the next years, 1AXP will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.41% on average per year.
- Based on estimates for the next years, 1AXP will show a small growth in Revenue. The Revenue will grow by 7.50% on average per year.
EPS Next Y16.7%
EPS Next 2Y14.82%
EPS Next 3Y14.74%
EPS Next 5Y13.41%
Revenue Next Year9.39%
Revenue Next 2Y9.18%
Revenue Next 3Y9.05%
Revenue Next 5Y7.5%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 24.80, the valuation of 1AXP can be described as rather expensive.
- 1AXP's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of 1AXP to the average of the S&P500 Index (28.60), we can say 1AXP is valued inline with the index average.
- A Price/Forward Earnings ratio of 21.00 indicates a rather expensive valuation of 1AXP.
- Based on the Price/Forward Earnings ratio, 1AXP is valued a bit more expensive than the industry average as 70.00% of the companies are valued more cheaply.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.83, 1AXP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.8 | ||
| Fwd PE | 21 |
4.2 Price Multiples
- 1AXP's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. 1AXP is cheaper than 70.00% of the companies in the same industry.
- 1AXP's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. 1AXP is more expensive than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.44 | ||
| EV/EBITDA | 17.09 |
4.3 Compensation for Growth
- 1AXP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of 1AXP may justify a higher PE ratio.
- A more expensive valuation may be justified as 1AXP's earnings are expected to grow with 14.74% in the coming years.
PEG (NY)1.48
PEG (5Y)2.42
EPS Next 2Y14.82%
EPS Next 3Y14.74%
5. Dividend
5.1 Amount
- 1AXP has a yearly dividend return of 0.89%, which is pretty low.
- 1AXP's Dividend Yield is a higher than the industry average which is at 1.75.
- With a Dividend Yield of 0.89, 1AXP pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.89% |
5.2 History
- The dividend of 1AXP is nicely growing with an annual growth rate of 10.33%!
Dividend Growth(5Y)10.33%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 21.11% of the earnings are spent on dividend by 1AXP. This is a low number and sustainable payout ratio.
- 1AXP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP21.11%
EPS Next 2Y14.82%
EPS Next 3Y14.74%
AMERICAN EXPRESS CO / 1AXP.MI FAQ
Can you provide the ChartMill fundamental rating for AMERICAN EXPRESS CO?
ChartMill assigns a fundamental rating of 5 / 10 to 1AXP.MI.
Can you provide the valuation status for AMERICAN EXPRESS CO?
ChartMill assigns a valuation rating of 2 / 10 to AMERICAN EXPRESS CO (1AXP.MI). This can be considered as Overvalued.
How profitable is AMERICAN EXPRESS CO (1AXP.MI) stock?
AMERICAN EXPRESS CO (1AXP.MI) has a profitability rating of 7 / 10.
What is the expected EPS growth for AMERICAN EXPRESS CO (1AXP.MI) stock?
The Earnings per Share (EPS) of AMERICAN EXPRESS CO (1AXP.MI) is expected to grow by 16.7% in the next year.
Can you provide the dividend sustainability for 1AXP stock?
The dividend rating of AMERICAN EXPRESS CO (1AXP.MI) is 5 / 10 and the dividend payout ratio is 21.11%.