JPMorgan Highlights American Express as Value Pick Amid Market Pullback

American Express (AXP) has been added to JPMorgan's list of value stocks for October, following an 18% decline in its stock price year-to-date. As of 11:24 a.m. ET on October 5, shares of the premium credit-card and payments company were trading near $302.70, down roughly 0.1%. The stock's current valuation is 6.69% below its $324.39 GF Value estimate, leaving limited room for disappointment.

The company's second-quarter revenue came in at $19.64 billion, a 10% increase from the previous year, driven by a 9% rise in Card Member spending. Credit-loss provisions decreased to $1.1 billion from $1.4 billion, though this improvement was partly due to a reserve release. Higher net write-offs offset some of these gains, indicating that lower provisions alone do not necessarily signal stronger borrower health.

JPMorgan's inclusion of American Express in its value picks has drawn attention to the stock. The company's future performance will hinge on spending growth and credit metrics. If customers continue to spend and losses remain controlled, the recent pullback could present a buying opportunity. However, if delinquencies rise, the modest valuation discount may quickly evaporate. The next earnings report will be crucial in providing clarity on the stock's prospects.