American Express (NYSE: AXP) Is one of those established companies that can easily be overlooked, if only because it has been around for so long (the company will be 175 next month). Although flashy financial shares can be tempting to buy, there are plenty of reasons why this long -standing company is a favorite of Warren Buffett’s Berkshire Hathaway portfolio.
The company accounts for around 15% of Berkshire’s interests, making it the second largest hold Apple. Here are a few reasons to follow Buffett’s leadership and to buy American Express while being traded under $ 320.
American Express reported results at the end of January 2024, with the total turnover rising 9% to $ 65.9 billion and a diluted profit per share increased by 25% to $ 14.01. These strong results were fed by increased expenditure by customers and strong customer acquisition (more about that later).
The strong results of top and bottom-line led to issue impressive 2025 guidelines, with sales growth of 9% and an estimated profit-per-share rise from 14% to $ 15.25, both in the center.
It is worth noting that American Express CFO Christophe Le Caillec recently said that the growth of the first quarter will be slower than in the previous quarter. Le Caillec said at a financial conference that fewer days in the quarter and a stronger dollar would cause lower income, but he also repeated that the full-ye guidelines of the American Express are still intact.
A striking from the results of the company was that it added a record number of new card acquisitions 13 million. Even more impressive is that 70% of those new cards are ‘products paying products’, which means that customers pay an annual fee to use them.
Adding to the good news for American Express is that younger, more prosperous customers increase expenses. Gen Z and Millennial Easters rose by 16% in the fourth quarter.
“In the entire industry, the number of millennials and Gen Z -consumers with premium products with an even faster pace is growing, and we add very creditworthy customers in these cohorts faster than industry, with a considerable space to continue this growth,” le Caillec said during the last win call.
Attracting younger customers is important for the company’s long -term strategy because it helps to lock customers for years. The management noted that as Z -customers get older, they will rather tap American Express for things like small business loans and other forms of credit.
