Why the stocks of American Express closed higher on Monday?

American Express Company (AXP) was founded in 1885 which provides financial services to its members. Its key products vary from credit cards to business cards and travel services etc. The company is referred as “AmEx” as well. Investors usually prefer to invest in this company as it is exceptional than that of VISA and MasterCard because except American Express, both VISA and MasterCard trades at a higher price to earnings multiple.
American Express stock price was increased by 0.70% and closed at $95.57 on Monday. The shares went as high as they could when the company unveiled its partnership with car ride service, Uber. The American Express cardholders who are enlisted for the reward program can either choose to earn double their reward points or to redeem points to use for Uber once the unification of both companies was finalized. Many analysts rated the American Express shares as a buy with an “A” rating. The generated revenue of the company has outdone the average growth in revenue of the industry by 1.4%. Hence, the company’s revenue has increased by 2.8% which have resulted in higher earnings per share as well.
Earnings per share of American Express have enhanced by 15.7% in this quarter as compared to last year. Since the past two years American Express and Co has shown a substantial increase in their per share earnings. It is expected that per share earnings will continue to accelerate in the years ahead. The present year the bottom line earrings of American Express Co. supersede the previous year’s earnings by $1.08. It is expected that earnings of American Express Co. would increase further in fiscal year 2014.
Furthermore, growth has been observed in American Express shares as shareholders are satisfied with the market position and the increase in earnings growth. This has been the driving factor for the company to generate more and more revenues and surpassing the industry average in many valuations as well. Hence, the higher share price of the company is justifiable according to the performance and the earnings growth as well. However on Monday, the company marked a new height by closing American Express stock just under $96. It is superior in such a way that people have to apply for the company’s credit cards and have to wait to be approved for it. Investors usually prefer to buy American Express Stock because of these facilities.
Hence in a nutshell, investors should feel secure while buying American Express stock because of its recent success and comfortable position in the market as well. Despite of a few issues, investors feel that the company has a good future ahead.