American Express' Mixed Q3 Results: Goldman Analyst Sees Silver Lining In Expense Management And NII Growth

American Express (AXP) reported mixed Q3 results, with revenue growth of 8% year-over-year, slightly missing analyst estimates, and adjusted EPS of $3.49, beating expectations. The company's net interest income (NII) grew, driven by higher card member spending and travel-related benefits. However, expenses increased by 9% due to higher customer engagement costs and marketing investments. American Express revised its FY24 outlook, expecting revenue growth of 9% and EPS of $13.75-$14.05, in line with analyst estimates.

American Express' expense management strategy contributed to its NII growth by improving operational efficiency. The company focused on reducing costs while maintaining service quality, enabling it to invest in growth areas such as digital services and marketing. This strategy allowed American Express to generate higher NII despite increased expenses.

Increased card member spending and travel-related benefits played a significant role in driving NII growth for American Express. As the economy recovered from the pandemic, consumers spent more on travel and entertainment, leading to higher card usage and fees. Additionally, American Express' international expansion contributed to its NII and card member spending growth by entering new markets and attracting more customers.

American Express' mixed Q3 results highlight the importance of expense management and NII growth in maintaining its competitive position. The company's ability to adapt to changing market conditions and focus on key growth areas will be crucial for its long-term success. As the economy continues to recover, American Express is well-positioned to capitalize on increased consumer spending and travel demand, driving further NII growth and stock price appreciation.