American Express Company (NYSE: AXP)
American Express Company (AXP), a credit card company on Thursday announced lower than expected 2016 earnings guidance. American Express posted a 38% decline in fourth quarter earnings. Earnings per share were $0.89 versus an expected $1.13 on sales of $8.4 billion which was in line with estimates. Additionally Credit Suisse lowered their price target for AXP to $66 from $71 on Friday morning.
American Express Company CEO’s Comments
“Our 2015 results and outlook reflect the reset in co-brand economics, pressures on merchant fees, the evolving regulatory environment and intense competition that have been re-shaping the payments industry,” said Kenneth I. Chenault, chairman and chief executive officer. “A number of cyclical factors in the broader economy have also weighed on our performance and influenced our outlook. Against that backdrop, and the fact that revenue growth has not accelerated as we anticipated, we are moving aggressively to streamline the company and drive efficiencies in order to take out $1 billion from our overall cost base by the end of 2017.” Kenneth continued saying “We have a great set of assets to draw upon, including a trusted brand, financial strength, an integrated business model, world class service and a history of innovation. We’re confident that we’ll not just deal with our near-term challenges, but return to growth and position the company for long-term success.” Business Wire
AXP Technical Analysis
AXP gapped down in price Friday to $58.08, down from the prior day’s close of $62.64, which is a 7% decrease in price. Taking a look at the daily chart, we can see the last time AXP traded below this price level we have to go all the way back to December 24, 2012 when it traded at $56.67. Taking a closer look at the daily chart we can see that AXP has been on decline all year. Recently the drop has become more pronounced, as back on December 29th AXP was trading at $70.55, equivalent to a 18% drop in price. With the gap down in price AXP is now trading at a new 52 week low. AXP has a float of 830.48 million shares and is trading 6 times the normal daily trading volume. AXP opened right at the pre market lows. For trading purposes, my entry point short would have been $58 looking for a run down through $57. My stop loss would have been $58.20 fearing anything above that and the stock would start to fill in the gap down.
American Express Company, together with its subsidiaries, provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. The company operates through four segments: U.S. Card Services, International Card Services, Global Commercial Services, and Global Network & Merchant Services. Its products and services include charge and credit card products; payments and expense management products and services; consumer and business travel services; stored value products, such as travelers cheques and other prepaid products; and network services. The companys products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale, and marketing and information products and services for merchants; fraud prevention services; and the design of customized customer loyalty and rewards programs. American Express Company sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through direct mail, online applications, in-house and third-party sales forces, and direct response advertising. The company was founded in 1850 and is headquartered in New York, New York. Yahoo Finance