American Express Shares Soar on Outlook, Dividend Hike

Key Takeaways

American Categorical added a document 12.5 million card accounts and elevated income 25% in 2022.

The corporate additionally introduced it plans to extend its quarterly dividend 15% to $0.60, starting within the present quarter.

The bank card supplier shares rose greater than 10%, almost erasing its losses from the final 12 months.

American Categorical (AXP) was the best-performing inventory within the Dow after the bank card supplier gave sturdy full-year steerage and raised its dividend.

CEO Stephen Squeri indicated the corporate produced sustained progress in buyer acquisitions, including a document 12.5 million new card accounts in 2022, together with excessive ranges of engagement and retention. He defined that allowed American Categorical to “construct scale whereas driving momentum throughout our core companies.”

Squeri stated due to that success, the corporate anticipates 2023 income will rise 15% to twenty%, with earnings per share (EPS) of $11 to $11.40. Each are effectively above analysts’ estimates.

Stronger Than Earlier than COVID-19

Squeri added that “our enterprise is in an excellent stronger place right this moment than earlier than the pandemic,” and that the agency is able to ship on its longer-term plan of double-digit annual proportion progress in income and mid-teens in EPS. American Categorical additionally introduced it’ll improve its quarterly dividend by 15% from $0.52 to $0.60, starting within the present quarter. 

Together with its full-year outlook, the corporate reported fourth quarter EPS of $2.07 and gross sales of $14.18 billion.

Shares of American Categorical soared 10.5%, and with right this moment’s beneficial properties they’re now down lower than 2% over the previous yr.

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