A Look at American Express’s Valuation Following Major Platinum Card Updates and New Premium Perks

If you follow American Express, you have probably noticed the wave of buzz around its Platinum Card lineup this week. The company has rolled out some of the biggest changes to its flagship cards in years, hiking the annual fee and adding travel, dining, and lifestyle perks aimed at consumers who demand a bit more from their plastic. Beyond the numbers, it is clear American Express is doubling down on its premium reputation by combining richer benefits with a new digital experience and even a limited-edition mirror card design.

All these updates have arrived at a time when American Express stock has been catching the market’s eye. Over the past year, shares have climbed nearly 28%, and the strong momentum has continued in recent months, making American Express one of the top performers in its peer group. The company’s steady revenue and income growth, along with its history of targeting high-spending customers, suggest that its refreshed Platinum Card program could further cement its competitive edge. Product-driven announcements and visible consumer enthusiasm have supported fresh investor interest, hinting at ongoing growth potential.

But with such a strong run behind it and a premium valuation, is American Express now a buy on these product changes? Or is the market already factoring in all of this future growth?

Most Popular Narrative: 5.9% Overvalued

The most widely followed narrative sees American Express shares as slightly overvalued based on forward-looking growth in revenue and earnings, balanced with risks from competition and evolving consumer behaviors.

The company's ongoing focus on premium cardmembers and product refreshes, especially the upcoming U.S. Platinum Card relaunch, positions American Express to benefit from consumers' growing demand for personalized experiences and value-added rewards. This trend is likely to boost net card fee growth and retention, which supports long-term revenue and fee income expansion.

Curious about the powerful ingredients behind this valuation call? One critical assumption is a bold three-year growth path paired with a premium earnings multiple typically reserved for market favorites. Want to understand which future trends and specific financial forecasts anchor this price target? The underlying projections could surprise even seasoned investors.

Result: Fair Value of $322.23 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising competition in the premium credit card space, as well as a growing preference for mobile wallets among younger consumers, could challenge this optimistic view.

Find out about the key risks to this American Express narrative.

Another View: Our DCF Model Differs

Looking at American Express using our SWS DCF model gives a different outlook. Rather than echoing the overvalued view, this approach challenges assumptions around future growth and cash flows. Is the story more complicated than headline multiples suggest?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out American Express for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own American Express Narrative

If you want to see how your own perspective might differ or put the data to the test yourself, you can craft a personalized American Express story in just a few minutes. Do it your way

A great starting point for your American Express research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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