AXP Cools Ahead of Second-Quarter Earnings Report

The company will report earnings before the open tomorrow

Deputy Editor
Jul 22, 2021 at 3:26 PM
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The shares of blue-chip payments name American Express Company (NYSE:AXP) are down 1.8% at $169.49 at last check. This negative price action comes just ahead of the company's second-quarter earnings report, which is due out before the open tomorrow, July 23.

AXP's options pits are somewhat muted ahead of the event, with volume running just over the intraday average. Options traders have been picking up long calls at a quicker-than-usual pace, though. In fact, the security sports a 50-day call/put volume ratio of 1.67 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 79% of readings from the past year. 

Echoing this, American Express stock's Schaeffer's put/call open interest ratio (SOIR) of 0.83 stands higher than only 6% of readings during the past 12 months. This suggests short-term options traders have rarely been more call biased. 

Options traders are pricing in a 3.8% post-earnings swing for AXP this time around, which is slightly larger than the 2.4% move the stock averaged after its last eight reports, regardless of direction. The equity has had a history of mostly negative next-day returns, which could be contributing to today's pullback, save for two back-to-back post-earnings pops in 2020.

The brokerage bunch, meanwhile, is split, with eight analysts saying "strong buy," and eight saying "hold" or worse. Should this pre-earnings pullback be just a flash in the pan, there could be room for analyst upgrades. Plus, several trendlines still sit as potential support just below, including the stock's 50-day moving average, which has contained several pullbacks this year. 

AXP July 22

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