Latest news with #Squeri
Yahoo
2 days ago
- Business
- Yahoo
Amex leans into B2B payments
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. American Express is nudging corporate clients to use their cards more regularly for business payments, CEO Steve Squeri said in a presentation last week. The push comes as Amex prepares for economic uncertainty. The card giant is looking for ways to increase business-to-business spending by clients who hold corporate or small business cards used for work-related purchases, he said. The New York City-based card company already offers an array of corporate cards that business owners and managers can use for work expenses, but aims to make those cards usable for a wider range of business-related purchases, Squeri said, although he provided few details. The CEO made the comments on May 29 at the Bernstein 41st Annual Strategic Decisions Conference in New York City. "We can do a better job of making more B2B payments viable," he said. "That means on both the card member side and the merchant side." Looking at costs for customers could be one way to achieve that goal, Squeri said. "There is a point where the right pricing decisions drive some more volume there," he said, although he did not elaborate. The acquisition of expense management platform Center was part of the company's push to expand B2B payment volume, Squeri said. 'It [Center] will ultimately become part of the Blueprint platform,' about which he said, 'It's got access to your card account, it's got a cash flow analysis, it's got working capital. We'll integrate travel into that,' he said. 'And so, think about that as a platform going forward for small and midsize businesses.' American Express is also "building out a global, multi-rail B2B network to act as a digital, one-stop shop where any business can buy and sell easily, quickly, and in one place, no matter what kind of payment is required," an Amex spokesperson said in an email. The spokesperson also stressed that the company's foothold in B2B payments goes beyond corporate and business credit cards, and includes partnerships with B2B payment companies such as Boost and Versapay. The card network has taken steps to upgrade its offerings for businesses recently. Last month, for example, American Express gave small business owners access to a virtual credit card that was previously available only to corporate clients. While Squeri did not explicitly link the company's pursuit of B2B payment volume with a possible recession, Amex is turning to business customers as consumer sentiment wavers in the face of economic uncertainty. The card network's cardholders change their spending habits when faced with economic uncertainty, Squeri said."When our cardholders get stressed, they spend a little bit less," Squeri said. Even after President Donald Trump walked back his most aggressive tariffs, economists pointed to a higher-than-average chance of a recession this year. JPMorgan Chase put the odds of the economy slipping into a recession this year at 40% in a report published on May 27, but even if that scenario were avoided, the bank's economists said the U.S. could still see tepid economic growth in the months to come. The bank's prediction was made before the president doubled tariffs on steel and aluminum Wednesday, which could worsen the economic picture by increasing prices in the U.S. Joblessness is something Amex is monitoring closely, more so than the volatile stock market, the company's CEO said. "The thing we really watch for is the unemployment rate," Squeri said. Recommended Reading Amex offers virtual card to small businesses
Yahoo
18-04-2025
- Business
- Yahoo
American Express CEO says his business is in great shape because its wealthy Gen Z clients aren't hurting at all
American Express is in great shape even as the outlook of the global economy remains shaky. CEO Stephen Squeri said total billed business on Amex cards jumped 7.5% year over year and new-card growth was fueled by Gen Z and millennials, who made up the bulk of new customers. The world economy is looking increasingly uncertain, but the CEO of American Express says its wealthy customers are doing just fine. The financial services company on Thursday reported a 7.5% year-over-year increase in total billed business on Amex cards in the first quarter, which helped push the company's revenue up 8% year over year to a better-than-expected $17 billion for the period. Driving the results was solid spending from its wealthy customer base, said CEO Stephen Squeri. 'Through the first 10 to 12 days, it's [spending] as strong as it was last quarter, maybe slightly, slightly stronger, and credit still continues to look really good,' he told Yahoo Finance. Billings on restaurants and lodging stayed strong during the quarter, even as the company saw a slight spending pullback in the airlines category. Squeri also said the company had seen no effect from 'pull forward'—the idea that the delayed effect of purchases from late 2024 could be artificially buoying earnings. Another boon for the company was the 3.4 million new cardholders it added during the quarter, 60% of which were Gen Z and millennials, Squeri said Thursday during the company's first-quarter earnings call. Those younger cardholders spent 14% more in the quarter, while Gen X and boomers spent 5% and 1% more, respectively, CNBC reported. While Amex has traditionally been seen as the elite card of the gray-haired upper class, the brand has increasingly caught the eye of Gen Z and millennials, who have sought out the card for its 'lifestyle' perks. In 2023, 75% of new consumer platinum and consumer gold accounts belonged to these two cohorts, Fortune reported. The company is increasingly catering to younger customers through its restaurant and hotel perks, Squeri said, adding that Gen Z and millennials spent more on eating out than any other customer demographic. Amex has focused on this effort especially with its acquisitions of reservation apps Resy and Tock as well as its relaunch of the Gold Card, Squeri added. 'Gold could have been renamed 'the Restaurant Card' between the rewards accelerator, the Resy credit, and the Global Dining collection,' he said. Despite some economists forecasting a recession on the horizon, Squeri said Amex was expecting strong growth for the rest of the year and reiterated the company's guidance of 8% to 10% revenue growth. This story was originally featured on Sign in to access your portfolio
Yahoo
18-04-2025
- Business
- Yahoo
Rich Still Swiping: Amex Defies Tariffs, Crushes Wall Street Forecasts
American Express (NYSE:AXP) is doing what it does bestleaning on wealthy spenders who aren't flinching, even as tariffs and economic noise rattle the rest of the market. First-quarter earnings per share rose 9% to $3.64, beating Wall Street's expectations, and total billed business hit $387.4 billion, up 6% year-over-year. While that fell slightly short of analyst targets, it wasn't enough to shake Amex's full-year forecast. The company is sticking to its guidance: 8%10% revenue growth and earnings between $15 and $15.50 a share. Warning! GuruFocus has detected 4 Warning Signs with F. CEO Steve Squeri summed it up bluntly: The Amex customer is acting like the Amex customer has acted. Translation? No slowdown. No panic. Even as tariffs and grocery bills climb, the company's high-income cardholderswho pay a premium for rewardsare still spending like it's business as usual. Squeri added that April trends are holding strong, with no signs of hesitation among Amex's core demographic. This cohort may not be recession-proof, but they're certainly recession-resistant. Beyond the numbers, Amex is playing both defense and offense. It set aside $1.2 billion for potential loan lossesless than expectedand made a strategic move to acquire expense management startup Center. Leadership is also shifting, with enterprise services president Anre Williams set to exit later this year. Through it all, the playbook is clear: bet on the big spenders, ride out the noise, and build for long-term profitabilitytariffs or not. This article first appeared on GuruFocus.
Yahoo
28-03-2025
- Business
- Yahoo
3 Reasons American Express Is a Long-Term Buy for 2030 and Beyond
Although growth stocks have a place in many portfolios, even young, risk-tolerant investors should own some long-term value stocks. These stocks that you can count on give you the flexibility to invest some of your other funds in higher-risk, higher-growth potential stocks, since they minimize the overall risk of your entire portfolio. American Express (NYSE: AXP) has been around since 1850 -- that's quite a track record of success. It's a top stock with a differentiated model and long-term growth drivers, and it offers stability for any kind of investor. Here are three reasons to buy it now and hold it for at least five years. American Express has created a brand that targets the affluent consumer, and this customer base is more resilient than the average person. That provides some security for American Express, and it has continued to report healthy, profitable growth despite the inflationary environment. Revenue increased 10% year over year (currency neutral) in 2024, and earnings per share were up 25% to $14.01. CEO Stephen Squeri noted that momentum increased toward the end of the year with a strong holiday season. Consider that even though American Express has only a fraction of competitor Visa's cards (153 million versus more than 2.9 billion for Visa), it takes in close to double Visa's revenue. Today, it's reaching a younger consumer base. It has gone through an image overhaul and is constantly refreshing its cards and rewards program to appeal to the modern cardmember, and younger members account for more of its spending than any other age group. Management said U.S. fee-based consumer premium cards are the fastest-growing segment in its industry, and that it has 25% of those cards, implying a lot of upside potential. Millennial and Gen Z customers are the fastest-growing age group in these cards, and American Express is adding them at a higher rate than the overall industry. American Express also acts as its own bank, providing it with diversified revenue streams and a streamlined operational model. Younger customers are driving growth here too, with millennial and Gen Z members accounting for half of the high-yield savings accounts and a third of total balances. One way American Express stands out is that it charges fees for many of its credit cards. That creates loyalty and a recurring revenue stream, and card fees grow at double-digit rates annually -- 16% in 2024, accounting for nearly 13% of total revenue. About 70% of new card acquisitions were for fee-based cards, and management expects fee growth to stay in the mid- to high teens in 2025. It also has high renewal rates, feeding into this cycle. Squeri pointed out that the U.S. consumer gold card, which is its gold-standard and has a $325 annual fee, is resonating with a younger customer base. This membership base will drive future growth for American Express. American Express pays a growing dividend that yields just over 1% at the current price, or about its average. The dividend is an important reason that Warren Buffett is such a fan, although he loves the whole package. American Express has paid a dividend since 1989,and it's increased more than 200% over the past 10 years. It just announced a 17% increase, from $0.70 to $0.82. That's an excellent indication of how management feels about the company's position and strength. American Express is a stock you can buy today and hold for years, benefiting from its role in the economy and passive income. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $312,980!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,421!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $537,825!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 24, 2025 American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has positions in and recommends Visa. The Motley Fool has a disclosure policy. 3 Reasons American Express Is a Long-Term Buy for 2030 and Beyond was originally published by The Motley Fool
Yahoo
23-03-2025
- Business
- Yahoo
American Express Is Raising Its Dividend by an Impressive 17%
Economic uncertainty hasn't seemed to have weighed on American Express (NYSE: AXP). The company recently announced a 17% increase to its quarterly dividend, lifting the payout from $0.70 to $0.82 per share. The new dividend will be payable on May 9 to shareholders of record as of April 4. This marks Amex's fourth consecutive annual dividend increase and its largest in over a decade. The consistent pattern of dividend growth reflects management's growing confidence in the company's long-term financial strength. Investors should sit up and take notice. Combining its fresh dividend hike for investors with its overall solid business, there's a lot to like about American Express stock at its current valuation. American Express reported record revenue of $65.9 billion in 2024, up 9% year over year (10% on a foreign exchange-adjusted basis). Net income rose to $10.1 billion, while earnings per share jumped 25% to $14.01. Some key highlights from card member spending data in the company's fourth quarter specifically were airline spending growing 13% year over year, and 19% year-over-year growth in spending on premium airline cabin seating. Travel and entertainment were "very, very strong in the quarter for us," explained Amex CEO Stephen Squeri during the company's earnings call. What's also noteworthy is the company's momentum with younger customers when it comes to the fee-based cards Amex is known for. This is a big tailwind for the company. Squeri explained during the call: [I]n the U.S., fee-based consumer premium cards are the fastest-growing part of the industry, and we have about 25% of those cards, indicating a continued upside opportunity. Across the industry, the number of millennials and Gen Z consumers with premium products are growing at an even faster rate, and we're adding highly creditworthy customers in these cohorts faster than the industry, with substantial room to continue this growth. In addition to strong card member engagement, Amex maintained healthy credit performance. Delinquency and write-off rates remained low by historical standards, helping support bottom-line strength and profitability. Looking ahead, American Express expects revenue to grow by 8% to 10% in 2025, with projected earnings per share between $15 and $15.50 (up from $13.35 in 2024 and $11.21 in 2023). In another testament to management's confidence in its business, American Express spent $5.9 billion repurchasing its shares in 2024. As management pointed out in its fourth-quarter call, the company has reduced its total share count by 17% since the beginning of 2019. This shows how the company's strong free cash flow generation gives it the flexibility to both reinvest in growth and return significant capital to shareholders. Further, significant repurchases recently indicate that management may believe its stock is undervalued. Risks still exist. A downturn in consumer spending, rising delinquencies, or tighter regulations could pressure future performance. But Amex's strong brand and focus on affluent, creditworthy customers give it a defensive edge in a volatile environment. Further, the stock's valuation of about 19 times earnings arguably does a good job of pricing in some of these risks. Ultimately, Amex's strong double-digit dividend hike signals more than just financial strength -- it signals long-term confidence. For investors looking for a mix of growth, stability, and income, American Express looks like a company worth considering investing in. Sure, shares aren't cheap. But high-quality companies like Amex rarely trade at a steep discount to a reasonable estimate of fair value. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $305,226!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,382!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $517,876!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 18, 2025 American Express is an advertising partner of Motley Fool Money. Daniel Sparks and his clients has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. American Express Is Raising Its Dividend by an Impressive 17% was originally published by The Motley Fool Sign in to access your portfolio
