American Express Company

(New York Stock Exchange)
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Somewhat Bullish +45

American Express Is Down 12% in 2026. What Its Latest Quarter Says About the Rebound

Earnings report Guidance raised AI-generated analysis

📈 AXP shares rebounded 7.5% in the past month after a 3.7% drop following the Q3 earnings report.

💰 The company raised full-year EPS guidance to $18.30-$18.60, aided by a $982 million gain from selling its Global Business Travel Group stake.

📊 Third-quarter revenue reached a record $20.1 billion, representing a 9% increase year-over-year.

💳 Billed business grew 8% to $454.0 billion while the net write-off rate improved to 1.8%.

📉 The forward P/E ratio compressed from 23.1x in December 2025 to 16.9x, indicating a valuation discount.

🔮 Analysts forecast normalized EPS growth of 13% for 2027 and 15% for 2028.

⚠️ Revenue growth slowed to 9% in Q3 from 10% in the prior quarter, slightly missing Wall Street estimates.

🏦 Major banks like Citi, Evercore ISI, and Morgan Stanley maintained Hold ratings with targets between $335 and $380.

📅 The fourth-quarter report in late January is expected to provide the first outlook for the coming year.

🛡️ Commercial spending rose just 3%, excluding co-brand portfolios that American Express has exited.

Bullish Signals
  • American Express raised its full-year EPS guidance to $18.30-$18.60, with an adjusted floor higher than the previous range.
  • Third-quarter revenue hit a record $20.1 billion, growing 9% year-over-year despite macroeconomic headwinds.
  • The company's billed business expanded 8% to $454.0 billion, demonstrating resilient consumer spending.
  • Net write-off rates improved to 1.8%, down from 1.9% a year ago, indicating better credit quality.
  • Analysts expect normalized EPS growth of 13% in 2027 and 15% in 2028, signaling long-term earnings power.
  • The stock has recovered 7.5% in the past month, making back the drop following the Q3 earnings release.
Risk Factors
  • Revenue growth slowed to 9% in the third quarter from 10% in the second quarter, showing a deceleration trend.
  • The forward P/E multiple has fallen significantly from a five-year high of 23.1x to 16.9x, compressing valuation.
  • Commercial spending rose only 3%, and excluding exited co-brand portfolios, growth was even weaker at 5%.
  • A significant portion of the EPS guidance raise came from a one-time $982 million gain on an asset sale.
  • The stock trades 16% below its 52-week high, reflecting lingering investor caution despite recent earnings beats.
Full Analysis
American Express (AXP) shares have recovered 7.5% in the past month, offsetting a 12% decline in 2026 following a recent earnings report. The company raised its full-year EPS guidance to $18.30-$18.60, driven primarily by a one-time $982 million pretax gain from selling its stake in Global Business Travel Group. On an adjusted basis, the outlook remains strong with a higher floor than the previous range, while third-quarter revenue hit a record $20.1 billion, up 9% year-over-year. Management reaffirmed its call for 10% revenue growth, supported by healthy underlying business metrics including an 8% rise in billed business to $454.0 billion and a decline in the net write-off rate to 1.8%. However, investors are noting that much of the recent stock price appreciation is priced into earnings multiples rather than valuation expansion, as the forward P/E has compressed from a five-year high of 23.1x to 16.9x. Analysts project normalized EPS growth of 13% in 2027 and 15% in 2028, though revenue growth slowed slightly to 9% in the third quarter compared to the prior quarter's 10%. While several major banks maintained Buy or Hold ratings with price targets ranging from $335 to $425, the consensus view suggests that future stock performance will rely heavily on sustained earnings growth rather than multiple re-rating. The upcoming fourth-quarter report in late January serves as a critical test for the company's trajectory. If revenue growth decelerates further or commercial spending continues to lag, the current valuation support may weaken. Investors are closely watching whether the one-time gains can be sustained by organic business performance without relying on asset sales or tax benefits.