Buy American Express Shares: Forecasts and Target Price
Published: August 19, 2020 by Valentina
Credit cards are now part of our lives and if we think that every time an AMEX customer makes a purchase, American Express earns a small percentage, we understand the enormous amount of money that this company makes. To buy American Express shares seems like a great investment, but is it really so?
AMEX stands for American Express and the answer to that question is: It depends.
We know that it is an ambiguous answer but in the trading world there is never an investment that is always advantageous or always disadvantageous. To understand how and when it is convenient to invest in the AMEX stock, continue reading this guide.
To invest, you first need an intermediary and they are not all the same: A broker without commissions, for example, can make a difference in small investments, because commissions can erode all or part of the profit of a winning trade.
Here is a short list of the best online brokers, where you can buy American Express shares without paying commissions. By choosing eToro, you can also make automatic investments.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 10€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
American Express: The origins
American Express is a global financial services provider.
Founded in 1850, it has the headquarter in Manhattan, New York. The history of this company – starting from the postal service of the second half of the 1800s – is truly incredible.
American Express (AMEX) started as an express mail business in New York and then evolved into other industries.
The company started a post-World War II acquisition policy that led it to expand financially.
On October 1, 1958, American Express launched its financial business with 250,000 cards, continued with the famous Travelers Checks in 1981, which were revolutionary travel tickets for the time.
Listed on Wall Street (with the abbreviation AXP), it is one of 30 companies that make up the Dow Jones Industrial Average.
How to buy American Express shares
Have we already talked about the importance of the intermediary in investments and that brokers without commissions are very convenient and reliable? How do we know if they are safe?
First, we must evaluate only regularly authorized brokers (such as those listed in this guide). The licenses they have offer an excellent guarantee of safety and reliability.
These brokers offer derivative contracts that have the same price as the stock they refer to and allow you to invest up or down and earn (if the forecast is correct) in any market scenario.
These contracts are called CFDs or Contracts for Difference.
Buy American Express shares with the best brokers
Now, let’s see what are the essential features that the best brokers must have to buy American Express shares safely:
- Have a FCA, CySEC or equivalent license
- Offer the possibility of investing both up and down (short selling)
- Don’t charge commissions
- Request a minimum deposit not exceeding 250 euros.
eToro, ForexTB and Trade.com have all these features and many others. Let’s try to examine them better in the next paragraphs.
eToro: Simplicity and automatic trading
eToro is the most used broker in the world and the over 7 million active users are a confirmation of its reliability.
FCA has licensed this broker.
You can see the trading platform, one of the easiest and fastest on the market, in the image below showing the American Express stock:
To buy American Express shares, just click on the “Invest” button, decide how much to invest in the operation and whether to buy or sell the stock.
In the image, you can also see the graphs and statistics with all the useful indicators for technical analysis.
The fame of eToro is also due to its patent which offers the possibility of making totally automatic investments.
This patent is called Copy Trading and allows you to copy the market operations of the best traders in the world (on eToro) in a totally automatic and free way.
To invest with Copy Trading just follow these simple steps:
- Register on eToro
- In the section “people”, you can choose the traders to copy based on the performance.
- With a click, Copy Trading will copy exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in proportion to your investment), without doing anything else.
Here are some of the best eToro Traders (which can be copied):
Both Copy Trading as well as traditional trading can also be tested on a free Demo account, without taking real risks.
For more details you can read our full eToro review.
ForexTB: Excellent Course and Free Trading Signals
ForexTB is a rapidly growing broker thanks to its constant support and services free of charge.
It has a regular license from CySEC. It offers two trading platforms to satisfy every type of trader:
- The web platform is easy to use and can be entered from any browser without downloading any software.
- Metatrader 4 is more technical and full of professional indicators and meets the needs of the more experienced traders.
Investor support begins with a trading course that this broker offers for free. This is an ebook where you can learn the basics of technical analysis. To download it click on the link below:
The ForexTB offer continues with the Trading Signals sent to all investors for free. These precise indications have a success rate of over 70% and are processed by Trading Central.
Trade.com: Small investments and free training
Trade.com has reached such a large number of customers thanks to its training course and the minimum deposit required to invest.
FCA has authorized this intermediary to operate in the UK.
The training that Trade.com offers starts from a trading course (in PDF format) available for free. This ebook lays the foundations of technical analysis and allows newbies to approach the world of investments in a simple and clear way.
In addition to the introductory course, the training continues with an entire didactic area available to traders. The material is divided into three levels of difficulty; basic, intermediate and advanced.
The trading platform available in Trade.com is really simple to use but includes all those tools sought by traders.
The initial deposit can be a hindrance for some low capitalized investors and for this reason Trade.com allows you to open an account with only 100 euros.
To practice, however, a free and unlimited Demo account is also available, which offers all the features of the real account but without the risk of losing real money.
American Express Shares: Real-time listing
American Express: Business model
AMEX is currently the largest debit card issuer in the world. American Express also offers brokerage services, mutual funds, and other investment-related products.
Born as a small express delivery company, it has grown into a Fortune 500 company with over 60,000 employees, 2,300 offices in 175 countries, and $ 43 billion in revenue.
American express dividend shares
Shares of American Express fell sharply in March 2020 due to the coronavirus, prices plunged 39% from their February highs.
The global crisis generated by the pandemic is causing American Express investors to worry, including famous traders such as Warren Buffett and his Berkshire Hathaway, which has $ 13 billion invested in AMEX.
The drop in the number of payments could hurt American Express’s revenue from transaction fees. Furthermore, the company’s lending business could be at risk if consumers find it difficult to “pay their bills”.
Despite this, American Express pays an annual dividend of $ 1.72 per share, with a dividend yield of 1.68%.
The company has increased its dividend for the past 8 consecutive years and is increasing the dividend regularly. American Express pays 20.98% of its earnings as a dividend.
Is it worth to buy American Express shares?
This is the crucial question. We try to answer it by better analyzing the financial data available and the performance of the stock.
It appears that the economic effects of COVID-19 could be less damaging than expected for the credit card industry.
Trading volumes are recovering rapidly and this upward trend together with the optimism of investors, are dragging the American Express stock and the entire credit card sector towards pre-crisis levels.
Below, we can see the historical trend of the AMEX stock and, apart from the collapse of March 2020, the growing trend is very stable. There is a lot of room for investment, while waiting for prices to return to the levels of the beginning of the year.
So, the answer to the question “Is it worth to buy American Express shares?” is yes.
The company is very well capitalized, has an unmatched worldwide network, and Warren Buffett is also an AMEX investor: All factors that make the investment potentially very profitable.
American Express Competitors
Even though AMEX is the market leader, it has to deal with giants that can undermine its leadership and with new electronic payment systems that are taking hold very quickly. Here are the main American Express competitors:
Buy American Express Shares: Forecasts
Now we come to the predictions for the title: Analysts expect a gradual return to normality regarding the payment activities, but it will be a slow return, and the time factor can make the difference in the performance of a stock.
The reason credit card providers were among the worst stock market players in the pandemic was fears of rising consumer defaults and risky loan disbursements.
In a deep recession, consumers may find it difficult to pay off debts, and credit cards are one of the most sensitive types of loans to payment difficulties.
Despite everything, analysts are moderately optimistic about the effects of the pandemic on American Express and in fact, it has mainly issued purchase ratings as we can see in this table:
- William Blair reiterated a “buy” on American Express shares
- Zacks Investment Research believes it is best to “wait” before investing in the stock
- Deutsche Bank has set a “Buy” rating for the AMEX stock
- Stephens has set a “Wait” rating
- DZ Bank has upgraded American Express from a “Wait” rating to a “Buy” rating
American Express Target price
Analysts at the eToro Trading Desk have issued purchase ratings for American Express.
The twelve-month average target price is $ 109.32, suggesting that the stock could grow 7.00% in one year.
American Express is a very well organized company, distributed in many countries around the world. Its recovery is certain and consequently also the growth of the stock.
The evaluation to be made concerns the timing. AMEX is an excellent long-term investment, a good medium-term investment, and a riskier investment in the short term, because the consequences of the coronavirus could make the stock suffer over the next few months.
So, it is better to buy American Express shares and keep them in your portfolio at least for one year in order to obtain a good economic return.
Before depositing money into a broker’s account, you can do some tests in Demo in order to avoid taking risks. Here are the official links to access the Demo accounts of the best online brokers:
- Practice the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free from this link
Yes, but not always. To find out the best way to invest in the stock you can read our guide.
Online brokers offering CFDs are the best way to buy American Express shares without paying commissions.
eToro is the best broker to buy American Express shares, which also allows you to make fully automatic investments.
The 12-month target price for the American Express is $ 109.32 per share.