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American Express Seeks to Grow Amid Numerous Challenges

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On Sep 14, 2015, we issued an updated research report on American Express CompanyAXP . As a premier brand in financial services with a unique business model, American Express benefits from strong spending growth among its affluent card members.

The company's revenue generation from international business is expected to accelerate as its cards are accepted at more locations, and when spending in international markets outpaces growth in domestic card spending.

However, the company is experiencing a rise in total expense because of the ongoing business building and re-pricing initiatives along with higher card member reward and service costs.

Also, American Express' results continue to be significantly impacted by a strengthening U.S. dollar. The company expects foreign exchange to have an adverse impact on the remainder of 2015. Results could also be hurt by an increase in interest rates, which the Fed will probably consider in its next meeting.

In order to combat these headwinds and secure growth, American Express is working out new and improved products, digital innovation and partnerships around the world.

Recently, the company also entered into a tie-up with Sam's Club that will to a certain degree make up for the revenue loss from the failed agreement with Costco, which will terminate in Mar 2016.

American Express carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this space are Blackhawk Network Holdings, Inc. HAWK , Moneygram International Inc. MGI and Consumer Portfolio Services, Inc. CPSS . Each of these stocks carries a Zacks Rank #2 (Buy).

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MONEYGRAM INTL (MGI): Free Stock Analysis Report

AMER EXPRESS CO (AXP): Free Stock Analysis Report

BLACKHAWK NETWK (HAWK): Free Stock Analysis Report

CONS PORTFOLIO (CPSS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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