AmEx (AXP) Ties Up to Upgrade Lowe's Business Rewards Card
American Express (AXP) intends to add a cash back reward option in Lowe's Business Rewards Card for benefiting small and mid-size business Card Member...
American Express Company AXP recently joined forces with the leading home improvement retailer, Lowe’s, in a bid to unveil a cash back reward feature for small and mid-size business Card Members. The added feature enables the Card Members to earn rewards and subsequently redeem them for availing cash back.
Users of Lowe's Business Rewards Card, which was jointly devised by American Express and Lowe’s more than a decade ago, will benefit as a result of the recent move. This, in turn, is expected to address the business-to-business (B2B) spending requirements and enhance cash flows of business Card Members, thereby, resulting in sound growth prospects of their businesses.
Addition of the latest feature highlights American Express’ sincere efforts to upgrade card offerings and bring about seamless business operations, in an effort to help Card Members. Through this initiative, the company aims to tap growing opportunities present in the construction industry, which is aided by the fact that several of the Lowe’s Business Card Members belong to the construction space.
The global construction industry bore the brunt of the COVID-19 induced volatilities last year. However, it seems to be coming out of the woods since the beginning of this year on the back of gradual economic recovery as stated by a report of MarketsandMarkets. The market is anticipated to witness a CAGR of 6% over the 2020-2024 period. Therefore, American Express’ initiative to manage cash flows for construction units seems to be time opportune as they usually grapple with huge upfront costs and higher waiting time for receiving backend payments.
Time and again, American Express has exhibited its commitment in rolling out innovative card offerings and upgrading the existing ones, and catering to the ever-changing payment needs of customers. It has been focused on technology upgradations and introductions of secured digital payment options to meet customers’ inclination toward online shopping, which compelled the majority of businesses to devise newer payment methods.
Moves similar to the latest one are likely to benefit revenues of the Global Commercial Services segment, through which the company offers a diverse array of cards, and payment, expense management and commercial financing solutions for helping small and mid-size organizations. Gradual economic recovery has led to elevated consumer spending, which has contributed to a 7% rise in the segment’s revenues in the first half of 2021.
American Express has undertaken several buyouts and partnerships in the past, which were aimed at bolstering its digital capabilities and offering increased card locations to its Card Members. These moves have also led to a strong global presence of the company. This year, it tied up with Bangkok Bank and Sberbank as a result of which American Express cardholders will have access to increased card locations across Thailand and Russia, respectively.
Zacks Rank & Price Performance
Shares of American Express, which carries a Zacks Rank #3 (Hold), have gained 59% in a year compared with the industry’s growth of 9.1%.
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Stocks to Consider
Some better-ranked stocks in the same space include Oportun Financial Corporation OPRT, Columbia Financial, Inc. CLBK and Equitable Holdings, Inc. EQH. While Oportun Financial sports a Zacks Rank #1 (Strong Buy), Columbia Financial and Equitable Holdings carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Oportun Financial, Columbia Financial and Equitable Holdings have a trailing four-quarter earnings surprise of 520.89%, 29.06% and 15.86%, on average, respectively.
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American Express Company (AXP): Free Stock Analysis Report
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