American Express Company (AXP)

Watch this fridays job report as I think that report will set the tone for the market, and my guess is it will be worse than expected...there are still companies laying people off work, they saying now that unemployment won't peak till the end of 2010....with the job market a lot worse than it was back in the march lows. How is wall street forcasting growth to continue this rally when people still losing jobs? makes no logical sense at all...if people are spending then it wouldn't take a rocket scientist to know they're spending money they don't have on credit cards that they likely won't be able to pay back...and on top of that banks are trying to raise interest rates...unbelievable!

I am going to do a Cross Sectional Analysis on five of the largest credit card companies, analyze the risk involved with the industry and determine on a relative basis which stock is undervalued. The companies I am evaluating are Discover Financial, American Express, Visa, Capital One and MasterCard…

Read the report at
http://stocklook.blogspot.com/

Or after Wednesday, October 28
http://stocklook.blogspot.com/2009/10/credit-card-stocks-dfs-axp-v-cof-and-ma.html

This company has had a nice rise in price over the last three months, although its price has been somewhat flat recently. Even though it built its business on the high net worth/high income credit card holder, it has diversified its business to a broader market. This diversification many have been ill timed as higher unemployment, higher taxes and depressed wage growth will likely increase the late payments and credit card defaults. The only thing that will save them is their new status as a bank, which gives them access to government assistance. Unfortunately, government assistance for losses doesn't mean that profits will grow. There fall will likely be gradual over the next few years.

For those unfamiliar with Walstreetpro, he's a hillbilly that smashes things in his garage while berating the state of the economy. It's highly cathartic to watch. He's unemployed and recently charged up his credit cards. He has since stopped paying.

http://www.youtube.com/watch?v=T2fVqDzjVis&feature=channel_page

Watch at least until he starts smashing foreign made products in his garage. Walstreetpro is the quintessential working class American.

I don't think that the recession has ended in spite of what Bernanke or anyone else says. With that in mind I think that AXP still has more challenging times ahead. Once the market does begin a correction, I think that AXP will decline more than the market does.

AXP cannot thrive in the coming credit environment; they'll be lucky to survive.

AX just can't establish its competitiveness against Visa, Mastercards and Discover...

fool

Businesses wont use it to allow purchases as they try to cut costs. They have lost users by cutting credit limits for no reason other than reducing risk. And other credit card companies are now offering the same level of service. The financial advisory side is full of weak advisors that recommend products clients don't need, just to turn a profit. Greed has blinded and reduced the value of American Express.

As unemployment rises, credit card companies such as American Express are going to experience greater losses than formerly anticipated. I don't expect them to meet earnings expectations.

AXP just got a lethal case of Obamamania.

Unless they find another niche or business line, they're going to be eating cake.

American Express began dumping their elite charge-card niche in the late 1990s. They've since been quite successful in launcing straight credit cards such as Blue and its clones. They also worked very hard cobranding credit cards with the likes of Delta Airlines, Hilton Hotels, Costco, Safeway, and several second rate sports teams. If you think their cardmember fees put them in a seperate class then you haven't looked hard enough at their exposure. Former CEO Harvey Golub worked hard to maintain brand and customer service. Current CEO Ken Chenault cut all that and works hard to maintain his 92 million dollar golden parachute: one of the largest in the US.

Overvalued, harder times are coming.

bad debts.

Will be hurt by upcoming rise in credit card defaults due to unemployment - definitely not being priced in considering the recent run-up in price.

Model is broken for an economy no longer over-spending on discretionary items. Lower salaries and higher taxes for top 5% of country will impact AXP customer more than any. Mgmt is also unable to deliver anything truly innovative in the market. Only hope is they get bought by JPMChase, Citi or WFC.

I'm not paying my bill and i have like 4 axp cards. im a student and yet i have 4 used to be 6 cards from them. I had no former credit history, but they did reduce my limits. Visa and MA better, but AXP is better than discover. Maybe the two should merge

Revenues down dramatically, charge offs up dramatically, direction of both will continue. So why has stock exploded?

The company is killing its future by treating current card holders badly