American Express Co.
) (AmEx) is scheduled to release its first-quarter 2014 financial
results after the closing bell on Apr 16. Let's have a look at
the company's earnings prediction right before the
What Sort of Surprise?
Our proven model shows that AmEx is unlikely to beat earnings
as it lacks the required combination of two key ingredients.
: AmEx has a negative Zacks ESP. That is because Expected
Surprise Prediction or
, which represents the difference between the Most Accurate
estimate of $1.29 per share and the Zacks Consensus Estimate of
$1.30, is -0.8%.
: AmEx has a Zacks Rank #3 (Hold). Note that stocks with Zacks
Rank #1, 2 and 3 have significantly higher chances of beating
earnings. Sell-rated stocks (#4 and 5) are kept under the radar
and are never considered going into the earnings
The combination of AmEx's Zacks Rank #3 and -0.8% ESP deter us
from being convinced as to whether earnings will beat or miss
expectations on Apr 16.
What is Directing Indifferent Earnings?
AmEx benefits from improved credit trends, new business
initiatives, strong capital ratios and return on equity (ROE) as
well as stable ratings. The positivity is backed by a trailing
four-quarter average surprise beat of 2.6%, although the
fourth-quarter 2013 generated a negative surprise of 0.8% due to
higher litigation costs.
Meanwhile, lower borrowing on cards along with rising payment
of outstanding debt may likely raise interest expense and impede
growth of loan fee income, thereby hampering the top line.
Although the company is keeping expenses in check, the impact of
regulations and lawsuits and higher loan loss provisions, given
lower lending reserves, raises potential risks.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this coming quarter:
Portfolio Recovery Associates Inc.
), earnings ESP of +2.33% and a Zacks Rank #2 (Buy).
), earnings ESP of +3.03% and a Zacks Rank #2.
CBOE Holdings Inc.
), earnings ESP of +3.70% and a Zacks Rank #3 (Hold).
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AMER EXPRESS CO (AXP): Free Stock Analysis
CBOE HOLDINGS (CBOE): Free Stock Analysis
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