American Express Company

(New York Stock Exchange)
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Bullish +65

American Express vs. PayPal: Which Stock Does Wall Street Expect to Grow Faster Through 2027?

Earnings report Financial outlook AI-generated analysis

πŸ“ˆ Analysts forecast American Express normalized EPS to grow 31% from 2025 to 2027, significantly outpacing PayPal's expected 11% growth.

πŸ’° AXP reported record third-quarter revenue of $20.1 billion and adjusted EPS of $4.68, a 13% increase year-over-year.

πŸ“Š Management raised full-year adjusted EPS guidance to $17.60-$17.90 and maintained a call for 10% revenue growth in 2026.

🏦 American Express trades at 17x forward earnings, near its five-year average but below its December 2025 peak of 23x.

πŸ“‰ PayPal's projected EPS growth is driven by share count reductions via buybacks, with consensus net income expected to fall in 2026.

πŸ” The primary risk for American Express is the credit health of its cardmembers, requiring a check on fourth-quarter bill payments.

Bullish Signals
  • Analysts expect American Express normalized EPS to rise 31% from 2025 to 2027, driven by organic revenue growth rather than share count reductions.
  • The company reported record third-quarter revenue of $20.1 billion and adjusted EPS of $4.68, representing a 13% year-over-year increase.
  • Management raised its full-year adjusted EPS guidance to a range of $17.60-$17.90 and reaffirmed a target for 10% revenue growth in 2026.
  • American Express is projected to grow earnings at approximately 15% annually through 2027, significantly outpacing the ~5% annual growth expected for PayPal.
Risk Factors
  • The stock trades at a premium valuation of 17x forward earnings compared to PayPal's lower multiple, reflecting higher expectations for future performance.
  • Credit risk remains the main concern, as a recession or deterioration in cardmember payment behavior could impact the company's lending business.
Full Analysis
Analysts project American Express (AXP) will significantly outpace PayPal in earnings growth through 2027, with normalized EPS expected to rise 31% compared to PayPal's anticipated 11%. This divergence is driven by AXP's robust revenue expansion and organic growth trajectory, whereas PayPal's projected earnings increase relies heavily on share count reductions via buybacks rather than top-line profit expansion. American Express recently reported a strong third quarter with record revenue of $20.1 billion and adjusted EPS climbing 13% to $4.68. Management has raised its full-year adjusted EPS guidance to between $17.60 and $17.90, reaffirming a target for 10% revenue growth in 2026. Consequently, the stock trades at 17x forward earnings, which is near its five-year average but represents a premium valuation relative to PayPal. Despite trading at a higher multiple, Wall Street views American Express as the superior investment due to its faster expected earnings growth of approximately 15% annually versus PayPal's roughly 5%. The primary risk for AXP remains the credit health of its cardmembers, with analysts noting that fourth-quarter results early next year will serve as a critical check on whether borrowers continue to pay their bills amidst potential economic headwinds.