CNBC's Jim Cramer told investors on Monday why he thinks it's smart to buy the stock. american express Wall Street was unimpressed with the latest earnings report, but said the company has a promising future, and the stock has been depressed.
“American Express has had great success in attracting many young customers who will likely stay with the company for decades to come,” he said. “That's the big story here, and rather than a line or two of phone calls about easing the current spending environment, management is responding calmly to this.”
American Express' stock price fell last week after it reported a slight revenue shortfall and lowered the company's full-year forecast for the index. By Monday's close, the stock had fallen more than 2%. But even though sales appeared to be lacking, the bank card company posted significant profits and raised its earnings outlook.
For Cramer, Wall Street isn't paying enough attention to American Express' earnings power. He also praised the credit numbers, saying they should improve as the Federal Reserve continues to lower interest rates.
He explained that American Express has long-term growth opportunities because it can bring in younger cardholders, who Kramer said have “higher lifetime value” than older customers. He said he felt that way. The company reported on its progress with Millennials and Generation Z members, and CFO Christophe Le Caillec said on a conference call that “we continue to see very strong loyalty among this younger demographic, with new customer retention rates increasing. higher than older generations.”
“If you believe in this big story, you know, as I do, that these periodic quarterly price cuts are an opportunity to get your hands on American Express,” Cramer said. Ta.
American Express did not respond to a request for comment.
