Fundamentals · AXP
DuPont (ROE Decomposition) for AXP
AI-generated plain-English read of dupont (roe decomposition) for AXP. Updated daily.
Leverage-driven ROE, stable
highROE looks steady (9.1%), but 8.99× leverage is doing most of the work. Margins and asset efficiency aren't moving — this is financial engineering, not compounding quality.
What will probably happen
- ROE is stable — no obvious catalyst for a sharp move in either direction from the DuPont picture alone.
- Critical leverage flag: a 8.99× equity multiplier means any margin contraction of even a few percentage points will wipe out ROE disproportionately. Watch for earnings revisions or debt-service pressure.
What to do
- If you HOLD this stock
- The 8.99× leverage is a structural risk for holders. Any macro headwind (rate rise, demand drop) that compresses margins gets amplified into ROE. Ensure your thesis accounts for this — the company has less margin of safety than its headline ROE suggests.
- If you are EVALUATING this stock
- Don't let the headline ROE (9.1%) mislead you — it's primarily a function of 8.99× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- No sharp DuPont signal either way. Premium is fairly priced for a fundamentals-stable story — wait for a clearer inflection in one of the legs before positioning directionally.
35 periods with all three DuPont legs populated — trend reads are reliable.
Technical details
Technical analysis
- ROE
- 9.1% — stable
- Sector context
- not provided
- Periods analysed
- 35
- Primary ROE driver
- Leverage Driven
- Profitability (net margin)
- 15.8% — stable, healthy
- Asset efficiency (turnover)
- 0.06× — stable, healthy
- Leverage (equity multiplier)
- 8.99× — stable, mixed [CRITICAL]
Key levels
| Level | Value |
|---|---|
| latest em | 8.991 |
| latest roe | 0.091 |
| latest margin | 0.158 |
| latest turnover | 0.064 |
| em high threshold | 4 |
| em critical threshold | 5 |
Caveats
- Equity multiplier of 9.0× is critically high. A small profitability decline gets amplified proportionally into ROE — this company is running with very thin margin of safety.