American Express Company

(New York Stock Exchange)
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Bullish +65

Is American Express (AXP) a Good Finance Stock to Buy For 2027?

Dividend Earnings report AI-generated analysis

πŸ“ˆ American Express ranks first in billionaire Mario Gabelli's fund despite being down 17% year-to-date, presenting a potential buying opportunity on the dip.

πŸ’° The stock trades at a forward P/E of 17.3 with analyst consensus projecting 15% EPS growth in 2026 and 14% in 2027.

πŸ“‰ Valuation compression is expected as earnings growth pushes the forward P/E down to approximately 13 by 2026 and under 12 by 2027.

πŸ’΅ Recent financials show a 14% rise in earnings per share for the first half of the year and four consecutive quarters of double-digit revenue growth.

πŸ›οΈ Card member spending rose 9% in the second quarter, representing the fastest FX-adjusted pace in three years.

πŸ›‘οΈ Credit quality remains stable with a net write-off rate of 2.0%, which is flat compared to the previous year.

πŸš€ Management guides to 10% revenue growth for 2026, supported by SGA Global Growth Strategy's view on operating leverage.

πŸ’³ American Express holds a durable edge with wealthy customers who pay high annual fees and stay for premium benefits like travel and dining.

πŸ“ˆ Net card fees have grown about 17% annually over the past seven years, driven by the refreshed Platinum Card and new partnerships.

🀝 Strategic alliances with Delta, Fanatics, and Accor continue to expand the network and attract premium customers.

πŸ’Έ The company returns capital effectively, having raised its dividend 58% over three years and cut its share count by 3% last year.

⚠️ The primary risk identified is a potential recession, which historically causes credit losses and write-offs to spike significantly.

Bullish Signals
  • American Express ranks first in billionaire Mario Gabelli's fund, signaling strong institutional confidence despite the stock being down 17% year-to-date.
  • The stock trades at a forward P/E of 17.3 with analyst consensus projecting 15% earnings per share growth in 2026 and 14% in 2027.
  • Recent performance shows a 14% rise in earnings per share for the first half of the year and four consecutive quarters of double-digit revenue growth.
  • Card member spending rose 9% in the second quarter, marking the fastest FX-adjusted pace in three years.
  • Net card fees have grown about 17% annually over the past seven years due to high annual fees from wealthy customers.
  • The refreshed Platinum Card and partnerships with Delta, Fanatics, and Accor are successfully attracting new premium customers.
  • Management guides to 10% revenue growth for 2026, supported by SGA Global Growth Strategy's view on operating leverage delivering mid-teen earnings growth.
Risk Factors
  • The biggest risk is a recession, which historically causes credit losses and write-offs to rise far above the current 2% level.
Full Analysis
American Express (AXP) is highlighted as a top investment pick, ranking first in billionaire Mario Gabelli's fund despite being down approximately 17% year-to-date. The stock trades at a forward P/E of 17.3, which analysts project will compress to around 13 by 2026 and under 12 by 2027 if earnings continue their expected growth trajectory. This valuation is supported by consensus estimates for 15% earnings per share growth in 2026 and 14% in 2027, significantly outpacing the market's long-term average of 10%. The company has demonstrated strong recent performance with earnings per shares rising 14% in the first half of the year and revenue growing at a double-digit rate for four consecutive quarters. Card member spending increased by 9% in the second quarter, marking the fastest FX-adjusted pace in three years, while net write-off rates remained flat at 2.0%. Management guides to 10% revenue growth for 2026, with analysts expecting roughly 9% growth in 2027, suggesting sustained operational leverage. American Express maintains a durable competitive advantage through its wealthy customer base, which generates high annual fees and remains loyal to travel and lifestyle benefits. Net card fees have grown at an impressive 17% annual rate over the past seven years, driven by the refreshed Platinum Card and strategic partnerships with Delta, Fanatics, and Accor. The company also returns significant capital to shareholders via a 58% dividend increase over three years and share count reductions.