American Express - Comparative Multiple Analysis

American Express (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of American Express

WikiWealth compares American Express's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with American Express's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for American Express.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to American Express's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for American Express's Analysis


How does this work? The Comparative Investment Analysis determines the value of American Express by comparing American Express financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of American Express.

See the American Express cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in American Express.

Also, see the American Express's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and American Express's valuation conclusion for a quick summary.