Buffett’s Bullish Stance
In the annals of investment lore, Warren Buffett, fondly known as the Oracle of Omaha, captured the intrigue of investors when Berkshire Hathaway, under his stewardship, first found favor in American Express Company (AXP) stock circa the first quarter of 2001.
A Record-breaking Journey
Since the fateful days of mid-February 2001, American Express stock has charted an odyssey, ascending by a staggering margin of about 350%, shooting well past rigorous Wall Street estimates with consummate ease.
Booming Returns
Imagine the possibility of reaping more than 3.5 times your initial investment if you had endeavored to plunge $1,000 into the stock when Buffett initially pledged his allegiance to its future. Today, your investment would have effortlessly burgeoned to around $4,530. That translates to an eye-popping 353% return, translating to an impressively robust 9.2% CAGR.
Present-day Positioning
Fast forward to the latest filings, and the evidence emerges that American Express now stands as Berkshire Hathaway’s third-largest holding, wielding substantial influence with a pronounced 7.12% stake in the portfolio, effectively exercising control over more than 20% of the company.
Upside Potential
The lurching momentum of the stock, augmenting by an astounding 20.5% in the last year, has left investors pondering the possibility of any remaining upward mobility. Despite this phenomenal rise, American Express remains strategically poised, especially with the Federal Reserve’s pivot to lower rates in the offing. Drawing benefit from a stabilized inflation scenario, the future heralds an era of bulging credit card spends, favorably impacting Amex’s business prospects.
Analyst Insights
- Deutsche Bank kicked off coverage on Jan. 10, doling out a Buy rating and setting a price target of $235 on the stock.
- JP Morgan, in a bid to align with the rapid upward surge, revised their price target from $167 to $205 post their coverage that ensued from Jan. 4.