American Express Valuation
| AXP Stock | USD 231.04 13.54 6.23% |
At this time, the firm appears to be fairly valued. American Express shows a prevailing Real Value of $216.38 per share. The current price of the firm is $231.04. Our model approximates the value of American Express from analyzing the firm fundamentals such as return on equity of 0.32, and Profit Margin of 0.15 % as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor buying undervalued instruments and selling overvalued instruments since, at some point, asset prices and their ongoing real values will blend. Key fundamental drivers impacting American Express' valuation include:
Price Book 5.5998 | Enterprise Value 172.1 B | Price Sales 2.8262 | Forward PE 16.8634 | Trailing PE 19.4196 |
Fairly Valued
Today
Please note that American Express' price fluctuation is very steady at this time. Calculation of the real value of American Express is based on 3 months time horizon. Increasing American Express' time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for American Express is useful when determining the fair value of the American stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of American Express. Since American Express is currently traded on the exchange, buyers and sellers on that exchange determine the market value of American Stock. However, American Express' intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value. | Historical | Market 231.04 | Real 216.38 | Target 182.44 | Hype 217.7 |
The real value of American Stock, also known as its intrinsic value, is the underlying worth of American Express Company, which is reflected in its stock price. It is based on American Express' financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of American Express' stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence American Express' stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
Estimating the potential upside or downside of American Express helps investors to forecast how American stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of American Express more accurately as focusing exclusively on American Express' fundamentals will not take into account other important factors: Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use American Express' intrinsic value based on its ongoing forecasts of American Express' financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against American Express' closest peers. When choosing an evaluation method for American Express, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.
American Express Investments |
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American Valuation Trend
Knowing American Express' actual value is paramount for traders to make sound investment determinations. American Express' real value is not only important for the investor to make better decisions but also for a more accurate overall view of American Express' financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both American Express' enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.
American Market Cap
American Express is rated third in market capitalization category among related companies. Market capitalization of Financials industry is presently estimated at about 1.2 Trillion. American Express retains roughly 156.61 Billion in market capitalization claiming about 13% of equities under Financials industry.American Express Valuation Ratios as Compared to Competition
Comparative valuation techniques use various fundamental indicators to help in determining American Express's current stock value. Our valuation model uses many indicators to compare American Express value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across American Express competition to find correlations between indicators driving American Express's intrinsic value. More Info.American Express is rated fourth in price to earning category among related companies. It is rated third in price to book category among related companies fabricating about 0.36 of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for American Express is roughly 2.77 . As of 04/19/2024, Price To Book Ratio is likely to drop to 2.99. Comparative valuation analysis is a catch-all model that can be used if you cannot value American Express by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for American Express' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the American Express' earnings, one of the primary drivers of an investment's value.Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates American Express' worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in American Express and how it compares across the competition.
About American Express Valuation
The stock valuation mechanism determines the current worth of American Express on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of American Express. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of American Express based exclusively on its fundamental and basic technical indicators. By analyzing American Express's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of American Express's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of American Express. We calculate exposure to American Express's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to American Express's related companies.| Last Reported | Projected for Next Year | ||
| Gross Profit | 34.5 B | 27.3 B | |
| Pretax Profit Margin | 0.17 | 0.14 | |
| Operating Profit Margin | 0.17 | 0.29 | |
| Net Profit Margin | 0.14 | 0.1 | |
| Gross Profit Margin | 0.57 | 0.69 |
American Express Quarterly Retained Earnings |
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8 Steps to conduct American Express' Valuation Analysis
Company's valuation is the process of determining the worth of any company in monetary terms. It estimates American Express' potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct American Express' valuation analysis, follow these 8 steps:- Gather financial information: Obtain American Express' financial statements, including balance sheets, income statements, and cash flow statements.
- Determine American Express' revenue streams: Identify American Express' primary sources of revenue, including products or services offered, target markets, and pricing strategies.
- Analyze market data: Research American Express' industry and market trends, including the size of the market, growth rate, and competition.
- Establish American Express' growth potential: Evaluate American Express' management, business model, and growth potential.
- Determine American Express' financial performance: Analyze its financial statements to assess its historical performance and future potential.
- Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
- Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate American Express' estimated value.
- Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
A single share of American Express represents a small ownership stake in the entity. As a stockholder of American, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.
American Express Dividends Analysis For Valuation
At this time, American Express' Dividend Yield is relatively stable compared to the past year. As of 04/19/2024, Dividend Payout Ratio is likely to grow to 0.37, though Dividends Paid is likely to grow to (1.7 B). . At this time, American Express' Retained Earnings are relatively stable compared to the past year. As of 04/19/2024, Earnings Yield is likely to grow to 0.07, while Retained Earnings Total Equity is likely to drop slightly above 10.7 B.
| Last Reported | Projected for Next Year | ||
| Dividends Paid | -1.8 B | -1.7 B | |
| Dividend Yield | 0.01 | 0.02 | |
| Dividend Payout Ratio | 0.21 | 0.37 | |
| Dividend Paid And Capex Coverage Ratio | 85.53 | 89.80 |
There are various types of dividends American Express can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of American shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from American Express directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When American pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of American Express by the value of the dividends paid out.
American Express Growth Indicators
Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as American Express does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
| Common Stock Shares Outstanding | 736 M | |
| Quarterly Earnings Growth Y O Y | 0.263 | |
| Forward Price Earnings | 16.8634 |
American Express Current Valuation Indicators
Valuation refers to the process of determining the present value of American Express and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value American we look at many different elements of the entity such as American's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. American Express' valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final American Express' valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as American Express, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use American Express' valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes American Express' worth.When determining whether American Express is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if American Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about American Express Stock. Highlighted below are key reports to facilitate an investment decision about American Express Stock: Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in American Express. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in interest. To learn how to invest in American Stock, please use our How to Invest in American Express guide.You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Complementary Tools for American Stock analysis
When running American Express' price analysis, check to measure American Express' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy American Express is operating at the current time. Most of American Express' value examination focuses on studying past and present price action to predict the probability of American Express' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move American Express' price. Additionally, you may evaluate how the addition of American Express to your portfolios can decrease your overall portfolio volatility.
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Is American Express' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of American Express. If investors know American will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about American Express listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.263 | Dividend Share 2.4 | Earnings Share 11.2 | Revenue Per Share 75.635 | Quarterly Revenue Growth 0.092 |
The market value of American Express is measured differently than its book value, which is the value of American that is recorded on the company's balance sheet. Investors also form their own opinion of American Express' value that differs from its market value or its book value, called intrinsic value, which is American Express' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because American Express' market value can be influenced by many factors that don't directly affect American Express' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between American Express' value and its price as these two are different measures arrived at by different means. Investors typically determine if American Express is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, American Express' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.