Oppenheimer Remains Sidelined on American Express (AXP) Following 2Q Report
Oppenheimer reiterated a Perform rating on American Express (NYSE: AXP) following the company's 2Q earnings report. Total revenues were $8.2B compared to the consensus of $8.3B. Pretax earnings were $2.3B, in line with estimates. Management reiterated their $5.40-$5.70 adjusted EPS guidance range for 2016.
Analyst Ben Chittenden commented, "As expected, AXP reported a noisy 2Q16. Reported EPS was $2.10, including $0.72 of gains from the Costco portfolio sale and $0.16 of restructuring charges. Thus, on an operating basis EPS was $1.54 vs our $1.54 estimate. It's hard to compare to consensus as we don't have a good breakdown of gains/restructuring charges embedded in all the estimates. We are beginning to move into the nosiest part of the Costco transition and growth initiative spending. It will take time to play out and it's happening at the same time as the business model transitions to become more lendcentric. We think it will take until mid '17 to get a real sense of AXP's true earnings power, and we remain on the sidelines."
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Shares of American Express closed at $64.48 yesterday.