American Express Inc, the travelers cheques and credit cards financial conglomerate in undervalued according to Wolfteam Ltd.
At revenue of 50.86 billion USD and 7.41 billion USD net profit for the calendar 2022 American Express' intrinsic worth is close to 230 billion USD compared to the current circa 120 billion USD market capitalisation.
American Express distributes 1.37 % dividend yield as well.
Part of the undervaluation of American Express is most probably due to the fact that American Express is more associated with both the Wall Street money center banks and the regional banks in the USA, than with financial technology companies like Visa Inc and Mastercard Inc.
The bread and butter business of American Express, however is credit card issuance and travelers cheques, which makes American Express a financial technology company or fintech essentially and thus American Express should be valued at higher Price/Earnings and Price/Sales multiples than US banks.
American Express is a favorite of Warren Buffett, whose Berkshire Hathaway Inc conglomerate keeps a multi billion USD position in American Express in its spare reserves investment portfolio. Warren Buffett has long expressed admiration for American Express business and Warren Buffett has been a strong proponent of American Express.
American express has a high 15 % net profit margin financial business and its revenue grew by approximately 12 % on average year on year during the last five reported quarters.
If a full blown financial crisis ensues, American Express will be heavily hurt naturally, but most probably not so deeply affected as the Wall Street and regional banks.
Judging both on past performance and future prospects American Express seems deeply undervalued is Wolfteam Ltd.'s corporate opinion.
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