American Express stock has gained more than 9% since the start of 2024. Saqib Iqbal, a financial analyst at Trading.Biz, thinks it can gain 10% more in February.
According to Saqib, although the payment giant missed quarterly earnings estimates, the 2024 guidance and a robust dividend yield will take the stock to new heights.
He said, “2023 was a massive year for the company. Its annual revenue increased by 15% to $61 billion; in the fourth quarter, the revenue increased to $16 billion.
“The year also saw the company gain 25 million new cardholders. At this price, the company is undervalued by 19%, and if it continues the same growth it did in January, there’s no reason the stock can gain 10% this month.
“Also, I am looking at the juicy dividends the company is set to raise to 0.70 every quarter. Truly, a great short-term and long-term stock to buy now.”
He further added that considering the current strength of the financial sector currently, it’s no surprise AXP is trading at an all-time high.
AXP analysis points to short-term strength
When looking at the stock analysis, the seasonality factor and robust growth point to short-term strength for the stock. If we look at the stock’s performance for the last three months, the stock has been in an uptrend since October 26.
Saqib thinks the stock’s relative strength can continue in February and reach $226 this month. The stock is trading above its 200 and 50-day moving averages. On the other hand, the next support for the stock lies at $192. If the stock falls below this level, it can reach $178.36.
