Amex Stock May Be Underrated Amid Strong Earnings Growth

American Express stock has lagged behind its peers and major indexes this year, but analysts say it may be undervalued.

The company's second-quarter earnings report on July 24 showed revenue up 10% to $19.6 billion, beating estimates, while earnings rose 11% to $4.53 per share, exceeding forecasts.

However, higher spending on customer engagement and acquisition costs, which increased by 12%, raised concerns about the company's growth prospects.

American Express CEO Stephen Squeri said the investment in marketing, technology, and customer engagement is necessary to maintain high retention rates and ensure long-term growth.