American ExpressShares of American Express have returned 46% this year. The shares trade for 15.3 times the consensus 2014 earnings estimate of $5.41 a share, among analysts polled by Thomson Reuters. The company on Oct. 16 reported third-quarter earnings of $1.354 billion, or $1.25 a share, compared to $1.405 billion, or $1.27 a share, during the second quarter and $1.250 billion, or $1.09 a share, during the third quarter of 2012. American Express said U.S. Card Services revenue grew 6% year-over-year to $4.286 billion during the third quarter. Period-end loan balances were up 2% year-over-year to $63.0 billion as of Sept. 30. With its focus on high-margin travel services and credit card lending, the company is known for generating very solid returns on equity. American Express reported a third-quarter return on average tangible common equity of 30.6%, increasing from 29.7% the previous quarter, but down from 33.5% a year earlier. KBW analyst Sanjay Sakhrani rates American Express "outperform," with an $87 price target. In a client note on Oct. 16, the analyst wrote that "the company's results were solid despite the challenging economic backdrop and we like the fact that the company has a number of levers that it can exercise if conditions become more challenging. Also, should the economic backdrop become more positive, we believe there is decent upside potential to top-line growth as well as our EPS estimates." AXP data by YCharts
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