Will American Categorical beat Q2 consensus with journey rebound, robust credit score high quality?

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Mrinal Pal

Will American Categorical (NYSE:AXP), to report Q2 outcomes on Jul. 22 earlier than market open, publish a consensus beat, with a rebound in journey and powerful credit score high quality amongst U.S. customers?

2022 is the primary COVID-off journey season as many nations elevate restrictions in an try to draw vacationers.

The corporate has a stable guess on tourism. Its strategic partnerships with airways and resort chains with robust model names create a stable income stream even when the macroeconomic atmosphere just isn’t excellent.

Additionally, AXP’s June U.S. shopper card delinquency price of 0.7% is unchanged from Could and barely up from a particularly low 0.6% price in June 2021. In the meantime, the online charge-off price of 0.8% improved from 0.9% in Could and elevated from 0.7% in June 2021.

The corporate has additionally reported extra utilization of playing cards by customers and companies.

Nevertheless, bills have grown way over revenues, which may influence the earnings. Card member rewards, enterprise improvement, card member providers and advertising bills have all grown sooner than revenues, based on Looking for Alpha Creator Librarian Capital.

Throughout Q1, bills elevated by 34% Y/Y to $9.06B from $6.75B. Bills associated to card member providers grew by 97% on a yearly foundation to $626M from $317M.

For Q2, consensus EPS estimate is $2.41 and consensus income estimate is $12.54B (+22.5% Y/Y).

Over the past 1 yr, AXP has crushed EPS estimates 75% of the time and income estimates 25% of the time.

Over the past 3 months, EPS estimates have seen 6 upward revisions and 9 downward revisions. Income estimates have seen 12 upward revisions and a pair of downward revisions.


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