American Express Financial Triumph: Record Revenues and Strategic Growth
A Year in Review: Unveiling the Success Story Behind the Soaring Revenues and EPS, and the Strategic Decisions That Shaped 2023
Overall Financial Performance
Q4 2022: Exceptional revenue and EPS growth, with record revenues of $52.9 billion for the full year (up 27%) and an EPS of $9.85.
Q1 2023: Robust revenue growth with record revenues of $14.3 billion (up 22% YoY). Guidance for 2023 was set at 15% to 17% revenue growth and EPS of $11 to $11.40.
Q2 2023: Continued strong performance, with record revenues of $15 billion (12% YoY increase) and an EPS of $2.89 (up 12%).
Q3 2023: Seventh consecutive quarter of strong performance, with record revenues of $15.4 billion (up 13% YoY) and an EPS of $3.30.
Q4 2023: Record revenues of $61 billion for the full year (up 15% FX-adjusted), with Q4 revenues nearly $16 billion and an EPS of $2.62.
Next Quarter Estimates:
Market Data:
52 Week High: $204.77
52 Week Low: $140.91
Avg. 3 Month Volume: 3.14 MM
5 Yr Beta: 1.22
Short Interest: 0.9%
Growth:
Fwd 2-Yr Rev. CAGR: 9.0%
Fwd 2-Yr EPS CAGR: 13.6%
Last 3-Yr Rev. CAGR: 18.8%
Last 3-Yr EPS CAGR: 43.8%
Capital Structure:
Market Cap: $145,633.89
Enterprise Value: $1.00
Shares Outstanding: 723.00 MM
LTM Net Debt: $2,000.00
Valuation:
Street Target Price: $198.92
NTM P/E: 16.02x
NTM MC/FCF: 14.13x
Efficiency:
LTM Gross Margin: 60.2%
LTM ROA: 3.4%
LTM ROE: 31.8%
LTM P/E: 17.97x
LTM P/BV: 5.20x
LTM P/NCAV: (29.65x)
Dividend Yield: 1.2%
Return Ratios:
Return on Assets (ROA): 3.0%
Return on Equity (ROE): 28.0%
Return on Common Equity: 27.5%
Margin Analysis:
Gross Profit Margin: 60.5%
SG&A Margin: 38.2%
EBT Excl. Non-Recurring Items Margin: 17.5%
Income From Continuing Operations Margin: 13.5%
Net Income Margin: 13.5%
Normalized Net Income Margin: 10.9%
Net Avail. For Common Margin: 13.3%
Asset Turnover:
Short Term Liquidity:
Current Ratio: 1.75x
Quick Ratio: 1.75x
Strategic Growth and Customer Engagement
Q4 2023: Implementation of a post-COVID growth plan focused on higher annual revenue and mid-teens EPS growth, with innovations and technology advancements in response to customer needs.
Q3 2023: Alignment with growth plans announced in 2022, aiming for over 10% annual revenue growth and mid-teens EPS growth in 2024 and beyond.
Card Member Spending and Demographics
Q1 2023: Global billed business up 16% YoY. Travel and Entertainment (T&E) spending increased by 39% YoY.
Q2 2023: All-time high in Card Member spending, especially strong in U.S. consumer and international segments.
Q3 & Q4 2023: Consistent growth in Card Member spending, with notable increases in fee-based product acquisitions.
Credit Metrics and Risk Management
Across all quarters: Consistent emphasis on best-in-class credit performance, disciplined growth, and risk management. High retention rates and stable credit metrics maintained throughout the year.
Investments and Strategic Partnerships
Q3 2023: Investments in value propositions, including Resy acquisition and a new partnership with Formula 1.
Q2 2023: Continuous strategic investments and extension of the Hilton partnership for 10 years.
Expense Management and Capital Allocation
Q4 2023: Effective expense management indicated by total expenses growing slower than revenue. Capital returned to shareholders amounted to $5.3 billion in 2023.
Q1 to Q3 2023: Focused on driving efficiencies in marketing and operating expenses, with full-year expenses anticipated around $14 billion to $14.5 billion.
International Business and Market Dynamics
Q1 & Q2 2023: Strong international growth, particularly in Card Services and T&E spending.
Q4 2022 & 2023: Robust performance in International Consumer and SME segments.
Outlook and Future Projections
Q4 2023: Anticipated revenue growth between 9% and 11% for 2024, with full-year EPS expected between $12.65 and $13.15. A planned increase in quarterly dividend to $0.70 per share.
Q1 to Q3 2023: Consistent commitment to achieving sustainable revenue growth in excess of 10% and mid-teen EPS growth in a steady-state macro environment.
Premium Customer Base Expansion
Q4 2023: Approximately 25 million new proprietary card accounts added over the last 2 years, with over 70% being fee-based products.
Generational and Geographical Reach
Q4 2023: Strong brand relevance among Millennial and Gen Z consumers, with younger consumers representing a significant portion of new account acquisitions.
Business Segments Performance
Q4 2023: U.S. Consumer segment grew by 7%, Commercial Services showed consistent growth, and International Card Services exhibited strong double-digit growth.
Credit and Loans Dynamics
Q4 2023: Year-over-year growth in loans and Card Member receivables by 13%, with continued strong credit performance.
CFO Transition Announcement
Q2 2023: Jeff Campbell stepped down as CFO, succeeded by Christophe Le Caillec.
SME and Corporate Spending
Q4 2022 & 2023: U.S. SME growth at 2% to 6%, with focus on aiding SME clients in business operations and international expansion.