American Express Stock Slips as CFO Says Wall Street Is Too Upbeat

American Express (AXP) shares took a dip on Thursday, February 11, 2025, after the company's CFO, Christophe Le Caillec, tempered investors' expectations about near-term top-line growth at an investor conference. The stock fell over 2% as of 1:41 p.m. ET, with Wall Street analysts currently expecting revenue net of interest expense to come in at close to $17.1 billion for the first quarter of 2025. Le Caillec attributed the lower revenue growth expectations to two main factors: one less day in the first quarter and a stronger dollar.

The first quarter of 2025 has one less day compared to the previous year, which will naturally lead to a decrease in revenue. This is a seasonal factor that affects many businesses and is not indicative of a long-term trend. Additionally, a stronger dollar can make American Express' products and services more expensive for international customers, potentially leading to a decrease in foreign spending. This factor could impact the company's performance in the coming quarters, as a stronger dollar may continue to affect international spending patterns.

Despite the short-term headwinds, American Express remains confident in its full-year guidance. The company expects to generate between 8% to 10% revenue growth and earnings per share of $15 to $15.50 in 2025. Management also expects to increase the company's quarterly dividend by 17%. This confidence in the company's long-term financial health and commitment to shareholder returns is reflected in its history of consistent dividend growth.

To maintain its growth momentum and further diversify its revenue streams, American Express could consider several strategic initiatives and acquisitions. These could include expanding its digital and mobile offerings, growing its merchant services, entering new markets, diversifying its product offerings, investing in data and analytics, and expanding its travel and entertainment offerings. By pursuing these opportunities, American Express can maintain its growth momentum and enhance shareholder value.

In conclusion, American Express' stock slipped on Thursday as the CFO expressed caution about Wall Street's revenue expectations for the first quarter of 2025. However, the company remains confident in its long-term financial health and commitment to shareholder returns. By pursuing strategic initiatives and acquisitions, American Express can maintain its growth momentum and further diversify its revenue streams, ultimately enhancing shareholder value.