AXP Undervalued, Analysts Say

American Express (AXP) stock has underperformed its peers and the broader market this year, but analysts say it may be undervalued.

The company reported a 10% increase in revenue to $19.6 billion in Q2, beating estimates of $19.7 billion, and raised its revenue guidance for the fiscal year to 10% growth.

However, expenses rose 12% to $14.5 billion in Q2, outpacing revenue growth, which may be a concern for investors.

Credit quality was strong, with provisions for credit losses and 30-day delinquency rates down year over year, but the company did not boost its earnings guidance.

CEO Stephen Squeri said that the higher spending on marketing, technology, and customer engagement and acquisition is necessary to maintain high retention rates and ensure long-term growth.