American Express Company

New York Stock Exchange
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Bullish +75

American Express CEO on blowout earnings, travel and $4 gas prices - Yahoo Finance

- 📉 American Express (AXP) stock declined at the market open despite reporting earnings that exceeded analyst expectations across all major metrics.

- 💰 Total revenue increased 11% year-over-year to $18.91 billion, surpassing the consensus estimate of $18.62 billion.

- 📈 Earnings per share rose 18% year-over-year to $4.28, beating the forecasted consensus of $4.03.

- 💳 Billed business grew 10% year-over-year to reach $428 billion against an estimated consensus of $420.57 billion.

- 🛍️ Luxury goods spending by cardholders increased significantly by 18%, demonstrating strong consumer resilience.

- ✈️ Spending on premium airline cabins saw growth of 12%, while global travel bookings reached a record high level.

- 🍽️ Restaurant sales remained robust with a 9% year-over-year increase despite macroeconomic headwinds.

- 👨‍💼 CEO Stephen Squeri noted that while the company is not representative of the entire economy, premium consumers are still spending confidently.

- 🔮 Amex reiterated its 2026 sales outlook, expecting between +9% to +10% growth in future revenue.

- 💵 The company raised its 2026 earnings per share outlook to a range of $17.30 to $17.90, above the consensus estimate of $17.57.

- 🗳️ Amex announced an increase on its iconic Platinum Card annual fee to $895 effective September 23, 2025.

- 📅 The company expects to recognize the financial benefits of the $200 fee hike over the coming quarters.

- ⛽ CEO Squeri emphasized that cardholders appear resilient and unaffected by recent high gas prices hovering around $4 per gallon.

- 🗓️ Advanced travel bookings are being cited as a key leading indicator suggesting consumers will continue to spend in lodging and travel sectors.

- 🤝 Management expressed confidence in continued spending patterns, though they acknowledged uncertainty about the broader economic future.

Bullish Signals
  • American Express reported impressive earnings, with revenue increasing 11% year over year to $18.91 billion, beating the consensus estimate of $18.62 billion.
  • Earnings per share surged 18% year over year to $4.28, significantly surpassing the analyst expectation of $4.03.
  • The company demonstrated resilient spending across key categories, including an 18% increase in luxury goods sales and a 12% rise in premium cabin bookings on airlines.
  • Billed business grew robustly by 10% year over year to reach $428 billion, exceeding the consensus estimate of $420.57 billion.
  • Amex reiterated strong forward guidance, projecting sales growth between 9% and 10% for 2026.
  • The company raised its annual Platinum card fee to $895 effective September 23, 2025, which is expected to provide a price benefit over the coming quarters.
  • Advanced travel bookings remain at a record high, serving as a leading indicator of continued consumer confidence and spending power despite elevated gas prices.
Risk Factors
  • American Express stock fell at the open despite beating earnings estimates, indicating potential market skepticism about sustainability amidst macroeconomic headwinds like $4 per gallon gas prices.
  • Amex raised the annual fee on its iconic Platinum card to $895 on Sept. 23, 2025, a move that could face customer pushback or reduce card ownership rates if consumers feel overcharged.
  • CEO Stephen Squeri's comments suggest that while premium consumers are resilient, Amex is not fully representative of the broader economy, leaving the company exposed to potential downturns in non-luxury segments.
  • Amex reiterated a 2026 sales outlook of +9% to +10% growth, which may be viewed as insufficient or vulnerable given the current inflationary pressures on households.
  • While advanced travel bookings are cited as a leading indicator, Squeri's admission that "only time will tell what will happen" introduces uncertainty about whether this trend can endure without support from economic stimulus.
Full Analysis
American Express (AXP) reported better-than-expected third-quarter earnings, with revenue rising 11% year-over-year to $18.91 billion and earnings per share jumping 18% to $4.28, significantly beating consensus estimates of $18.62 billion and $4.03 respectively. Despite the stock falling at the market open due to broader concerns about high gas prices, CEO Stephen Squeri emphasized the resilience of Amex's customer base, citing an 18% surge in retail luxury spend, 12% growth in premium airline cabin spending, and record global travel bookings that suggest consumers are prioritizing discretionary purchases despite inflationary pressures. The company provided specific category breakdowns showing robust performance across its core portfolio, with luxury goods spending up 18%, restaurant sales increasing 9%, and premium airline cabin transactions growing by 12%. Looking ahead, Amex reiterated its full-year 2026 outlook, projecting sales growth between 9% and 10% and earnings per share ranging from $17.30 to $17.90, which aligns closely with the current market consensus of $17.57. Squeri highlighted that advanced travel bookings serve as a key leading indicator for continued consumer spending, expressing confidence that the premium segment remains active even if economic conditions shift later in the year. In addition to operational performance, Amex announced a strategic move to increase the annual fee on its iconic Platinum Card to $895 effective September 23, 2025, a $200 hike from the previous rate that the company expects to realize benefits over the coming quarters. This price adjustment reflects the ongoing value premium cardholders place on travel and entertainment perks, reinforcing the company's strategy of targeting wealthier demographics who demonstrate resilience against macroeconomic headwinds like record gas prices.