(Note: The author of this fundamental analysis is a financial writer and portfolio manager.)

American Express Co. (AXP) has jumped by nearly 25% over the past year, beating the S&P 500 by about 10 percentage points. But 2018 has been a different story, with shares down by over 7% since peaking in late February. Analysts remain upbeat on the payment processor and see shares rising by nearly 14% from its current price of approximately $94. 

The company is expected to report results Wednesday after the close of trading, and analysts are looking for revenue to jump by more than 21% in the first quarter to $9.59 billion, while earnings are seen rising by 27.7% to $1.71 per share. But more impressively, analysts have been upping those revenue and earnings estimates since the start of the year.

AXP Chart

AXP data by YCharts

Rising Price Target

Analysts have been steadily upping their price targets on the stock, raising it by over 7% just since the start of 2018, to an average of $107.25. They have also become increasingly more bullish, with 42% of the 33 analysts covering the stock rating shares with a buy or outperform, up from only 34% of 29 analysts on Dec. 30. 

AXP Price Target Chart

Strong Growth

Analysts have plenty of reason to be bullish as well, with earnings for 2018 expected to climb 21%, on revenue growth of 19%, both substantial numbers, and a significant improvement over 2017 results. Earnings are expected to slow after the one-year tax bump normalizes, with profits growing 11% in 2019, and 10.4% in 2020.  But the company is trading at 11.9 times 2019 earnings estimates of $7.89, well below the S&P 500 forward P/E ratio of 16.5, and the average for the Select Sectors SPDR's Financial ETF (XLF) top 25 holdings at 13.2.

Strong Quarter Expected

Analysts are looking for significant growth when American Express reports on Wednesday, with quarterly revenue and earnings seen jumping sustainably over last year. Analysts have been steadily increasing their revenue estimates for the stock over the past month, by nearly 11%. On March 7, analysts were only looking for revenue of 8.64 billion, and the figure has ballooned to $9.52 billion. Analysts have also been steadily upping the earnings outlook for the company this quarter as well with earnings estimates climbing by over 13% since the start of the year, to $1.71 from $1.57 per share. 

AXP Revenue Estimates for Current Quarter Chart

It seems, for now, that analysts have a lot of conviction for an improving outlook for shares of American Express. Results on April 18 will tell us if they are too optimistic.

Michael Kramer is the founder of Mott Capital Management LLC, a registered investment adviser, and the founder of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of two to three years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.Upon request, the advisor will provide a list of all recommendation made during the past twelve months. Past performance is not indicative of future performance.