AXP: Future Performance Will Reflect Execution On Premium Card Refresh Amid Mixed Sentiment

The analyst price target for American Express has been raised modestly, as analysts factor in a roughly $3 uptick in fair value to about $355 per share. This is supported by stronger billings growth, resilient credit trends, and confidence in the earnings impact of the Platinum refresh, despite mixed near term guidance.

Analyst Commentary

Analysts remain divided on American Express, with a cluster of recent target price increases and rating upgrades offset by a minority who remain cautious on valuation and near term earnings visibility. The resulting consensus skews constructive, but with a clear emphasis on execution against updated guidance and the trajectory of revenue growth into 2026.

Bullish Takeaways

• Bullish analysts highlight a series of target price raises into the mid to high $300s, arguing that stronger billings growth, stable credit performance, and the earnings uplift from the Platinum refresh justify applying higher earnings multiples.
• Upgrades from prior Sell ratings to Hold are framed as recognition that recent operating performance and revised FY25 guidance have reduced downside risk, with the stock now seen as more fairly reflecting fundamentals rather than being overvalued.
• Some bullish analysts are nudging up medium term EPS estimates as they factor in resilient spending trends, especially in international and commercial segments, viewing these as durable growth drivers rather than cyclical spikes.
• At a sector level, an improving backdrop for consumer finance, including expectations for lower interest rates and better credit performance, is seen as a tailwind that supports higher fair value ranges for American Express within its peer group.

Bearish Takeaways

• Bearish analysts maintain that, even after strong quarterly results, the stock screens as expensive relative to peers, leading to Sell ratings centered on valuation rather than a deterioration in business quality.
• Some point out that the implied Q4 EPS guidance is below consensus, underscoring concern that near term earnings momentum may not fully match market expectations despite the recent beat and raise print.
• There is skepticism around management's updated revenue and EPS guidance, with at least one research view characterizing the revision as effectively a guide down versus prior Street estimates once the new assumptions are incorporated.
• Cautious analysts stress that a meaningful portion of the bull case depends on the Platinum refresh driving an acceleration to double digit revenue growth by 2026, and they see execution risk if engagement, spend, or acquisition trends fall short of current projections.

What's in the News

• Raised full year 2025 guidance, now targeting 9% to 10% revenue growth and EPS between $15.20 and $15.50, reinforcing confidence in double digit top line expansion. (Company guidance)
• Continued to execute on its multi year capital return program, repurchasing 7.3 million shares for about $2.3 billion in the latest quarter and completing 8.24% of shares outstanding under the 2023 buyback authorization. (Company disclosure)
• Launched major enhancements to U.S. Consumer and Business Platinum Cards, adding over $3,500 in annual value, new travel and business credits, and a limited edition mirror card design to deepen engagement among premium customers. (Product announcement)
• Introduced Amex Ads, a new digital advertising platform that uses first party spend and travel data to deliver targeted campaigns to 34 million U.S. consumer Card Members, opening a new high margin revenue stream. (Product announcement)
• Expanded its Las Vegas travel and experiential footprint, adding new Fine Hotels + Resorts properties, unveiling exclusive F1 Grand Prix access, and launching the 1850 by American Express pop up for Platinum and Centurion Members on the Strip. (Product announcements)

Valuation Changes

• The fair value estimate has risen slightly, increasing from about $351.87 to approximately $354.83 per share, reflecting a modest uplift in the intrinsic value assessment.
• The discount rate has fallen marginally, edging down from roughly 8.39% to about 8.38%, indicating a slightly lower required return applied to future cash flows.
• The revenue growth assumption is effectively unchanged, holding near 10.28%, signaling no material revision to the long term top line outlook.
• The net profit margin has inched higher, moving from approximately 16.01% to just above 16.01%, reinforcing expectations for stable profitability over the forecast period.
• The future P/E multiple has risen modestly, increasing from about 20.75x to roughly 20.91x, implying a slightly higher valuation multiple on projected earnings.