KBW Talks Mobile Payments and More With American Express

June 13, 2019         By: Steven Anderson

When a company like Keefe, Bruyette & Woods (KBW) mentions something as a “top idea,” it’s generally a good idea to pay attention to that company. Especially for us, it’s a good idea when that top idea falls in the consumer finance space. So when KBW sent us word about recent conversations held with its top idea (and mobile payments mainstay) American Express—more specifically with the investor relations team, the chief financial officer Jeff Campbell and the CEO Steve Squeri—that was worth talking about.

KBW noted that American Express had several potential angles it could exploit to make growth happen, but the company was instead focused tightly on a few key areas, giving it a better chance at success. Right now, the company has three major strategic initiatives: getting more business out of its current customer base, pursuing international expansion judiciously, and improving its total number and quality of partnerships in the field.

That’s not all American Express has in the way of goals going forward; it’s also eager to post greater growth than the card industry as a whole, drive its leadership position in premium operations, expand its network acceptance and put more into its business-to-business operations.

KBW looks for these priorities to push results in a pretty big way, expecting eight to 10 percent revenue growth as well as double-digit gains in earnings per share. In fact, about the only thing that could stop that, according to KBW, is “…meaningful deterioration in the macroeconomic situation.” Since management doesn’t see any problems on that front, American Express’ gains should be secure.

American Express has been working from a position of comparative weakness in the market for some time now, quite a bit behind Visa and Mastercard. However, its work to lock up the B2B niche has had some excellent results for the company, and there’s no sign this will stop. While its ability to gain ground in the consumer space is somewhat limited due to the aforementioned duo’s primacy, it may be able to make headway as the business alternative of choice.

KBW seems to think optimistically about American Express’ chances, and though only time will tell if they’re right, the positive outcome seems reasonable enough here.