We recently compiled a list of the Jim Cramer is Talking About These 14 Stocks Before Earnings. In this article, we are going to take a look at where American Express Company (NYSE:AXP) stands against the other stocks Jim Cramer is talking about before earnings.
As earnings season kicks off, Jim Cramer of Mad Money offered insights on what investors should watch in the coming week on Wall Street. He highlighted the anticipated reports from several major banks, along with a few other companies, as key events to monitor.
Cramer expressed optimism about the current market conditions, noting that the situation aligns with his previous predictions that the market would thrive once the Federal Reserve began reducing interest rates while the economy remained strong. He remarked on the spectacular earnings reported by some major banks on Friday, emphasizing that this positive news is particularly impactful now, as opposed to previous instances when the Fed was tightening, causing good news to go largely unnoticed. Cramer believes that with the Fed now supportive of the market, there is potential for more favorable times ahead.
Looking to Monday, Cramer predicted that the focus will shift away from earnings reports due to other significant developments over the weekend. He mentioned the anticipated unveiling of a Chinese stimulus package and noted that although the rally in China has stalled, it could regain momentum if the Chinese government injects substantial funds into real estate and the stock market.
“Now, on Monday, we won’t be focused on earnings. There’s a lot of other stuff happening over the weekend. For instance, I think we’ll be parsing the Chinese stimulus package that’s going to be unveiled. The China rally is stalled, but it can get rolling again if the Chinese Communist Party keeps throwing tens of billions of dollars for the stimulus at real estate, at the stock market.”
Cramer warned that the financial sector will face a significant test on Tuesday, as different banks will be reporting their earnings. Cramer reminded investors that we are just at the beginning of one of the year’s four reporting periods, which can be chaotic and open to various interpretations.
“We’re at the beginning of one of the year’s four reporting periods,” he said. “They’re jumbled. They’re open to a lot of interpretation. They’re fast. So listen to the calls, ponder a moment, and only then should you pull the trigger.”
Our Methodology
For this article, we compiled a list of 14 stocks that are slated to release earnings this week and were discussed by Cramer during his episode of Mad Money on October 11. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up view of a payment terminal, capturing the sophistication of a payment network.
American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 68
Cramer likes American Express Company (NYSE:AXP) stock and has been recommending it for a while now. He explained:
“Finally… one of my favorite companies, American Express. The last two times it got hit, I told you to buy it. That was right. Maybe the third time’s the charm, and it won’t even go down. The Amex conference call is a great affair because the company gives you so much information about who’s spending, what people are doing. Gen X, Gen Z, they got it all. If you monitor this one, if it gets hit, I’m going to tell you, it’ll probably be a buy. It’s been right and I’m not going to change my view.”
American Express (NYSE:AXP) is a financial services provider, best known for its credit and charge card offerings, as well as its banking solutions and expense management services. Recently, in an episode of Mad Money, Cramer discussed the stock’s recent downgrade by JPMorgan, which shifted its rating from Buy to Hold. Cramer expressed concerns about the timing of this decision, especially considering the potential for a rate-cutting cycle in the near future. He suggested that selling shares at this point could result in missing out on future gains as the stock may rebound quickly from such downgrades.
In the second quarter, American Express (NYSE:AXP) reported total revenue of $12.6 billion, with an impressive 77% generated from non-interest income. The income primarily comes from discount revenue earned from merchants and various fees charged to cardholders.
Furthermore, on October 14, Monness Crespi raised the price target on the stock to $300 from $265 and kept a Buy rating ahead of the company’s upcoming third-quarter results. The changes are owed to updates to the firm’s quarterly estimates, particularly for the calendar year 2025. The analysis also notes expectations for the company’s growth to outperform competitors like Visa and Mastercard in what is anticipated to be a softer spending environment, which could further solidify its position in the market.
Overall AXP ranks 9th on our list of the stocks Jim Cramer is talking about before earnings. While we acknowledge the potential of AXP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AXP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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