Known for its premium credit card offerings, American Express is a powerhouse in the financial services sector. And if you have any doubts about this being a quality enterprise, it’s worth noting that Warren Buffett-led Berkshire Hathaway is a major investor, owning more than 21% of the business.
American Express is taking a hit in the past few days. Should investors buy this financial stock while it trades well below $250 per share?
The company’s stellar performance is extremely encouraging. During the three-month period that ended June 30, American Express reported revenue of $16.3 billion, which was up 8% year over year. This was driven by higher payment volume and 3.3 million new active cards. Moreover, Amex is seeing strong cross-border payments activity.
The recent financial success is impressive because it’s happening during an uncertain economic period. Inflationary pressures continue to impact consumers. And there are still fears out there about a recession happening. But Amex is on a roll. Management even raised EPS guidance for 2024, revealing their near-term confidence.
Zooming out, the company’s long-term gains are also noteworthy. Revenue and adjusted diluted EPS in Q2 2024 were 51% and 69% higher, respectively, than in the same period in 2019. Amex has been and continues to be a compounding machine.
