KBW Takes a Closer Look at Mobile Payments Power American Express

Earnings numbers are still pouring out around various firms and their third-quarter operations. With the big game gearing up and holiday shopping season about to start up in earnest, the numbers from the third quarter will set the stage for the rest of the year. Our friends at Keefe, Bruyette & Woods (KBW) dropped word our way about the third quarter for one mobile payments power in the field: American Express (AXP).

The word about AXP is perhaps best described as “as expected.” KBW analysts previously figured that the numbers out of AXP would look a certain way, and for the most part, the needle was either threaded or at least close to it. In fact, KBW looks for some further positive results to come thanks to several “tailwinds” that will give AXP a leg up in the field, including a new slate of product line refreshes and some “fee income enhancements,” including new connections with Delta.

For the fourth quarter, KBW expects revenue growth in the eight to 10 percent range, with earnings per share (EPS) about what would be expected based on current year-to-date results. For the entirety of 2019, meanwhile, provision growth should be about 10 percent, which was down a bit from earlier projections putting it at the less-than-20 percent range. 2020 expectations, meanwhile, are for continued high revenue growth as well as double-digit growth in EPS growth.

KBW is quick to note, though, that these projections assume a comparatively stable economic environment, which these days is on par with wearing a big “kick me” sign everywhere you go and hoping no one will actually take you up on it. If there’s one thing that the last few years have made clear—abundantly clear—it’s that looking for stability is a terrible idea. It’s pretty much nowhere to be had.

Still, short-term stability may not be out of line, and based on what we know so far, AXP is likely to hold its line going forward, if only for a while. We can’t count on stability to be stable for very long, so make hay while the sun shines, as a rainy day may be just around the corner.