Is American Express (AXP) Still a Buy After Recent Gains? A Fresh Look at Valuation

American Express (AXP) recently saw its stock price edge slightly higher over the past week, gaining about 6%. Some investors are reviewing its performance to see whether the current valuation reflects the company’s growth potential and recent trends.

See our latest analysis for American Express.

After a modest but steady week, American Express’s share price has gained 22% year-to-date, reflecting a strong tailwind as investors respond to the company’s healthy financial growth and a relatively robust risk profile. The momentum is building, with an impressive 21% total shareholder return over the past year and a remarkable 139% total return across three years. This highlights sustained long-term outperformance.

If you’re feeling inspired by American Express’s recent run, it could be the perfect moment to broaden your search and discover fast growing stocks with high insider ownership

With American Express’s substantial gains attracting attention, the key question is whether there is still room for further upside or if the impressive growth prospects are already fully reflected in the current share price. Is there a real buying opportunity, or has the market already priced in what comes next?

Most Popular Narrative: 3.7% Overvalued

According to the most widely followed narrative, American Express's fair value estimate trails its last close price, keeping investors on edge as optimism meets heightened expectations.

Double-digit international growth, ongoing investments in global product innovation, and expanding merchant acceptance tap into the expanding global middle class and increased digital payment adoption. These trends are expected to raise transaction volumes and support both top-line growth and long-term earnings diversification.

Read the complete narrative.

Curious what powers this ambitious valuation? The narrative relies on bold global growth assumptions and impressive profit margins that position American Express in rare territory. This perspective anticipates a future multiple beyond the industry norm. Want to see exactly what drives these projections? Jump into the full narrative to unlock all the numbers and logic behind this fair value.

Result: Fair Value of $350.87 (OVERVALUED)

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

However, shifting consumer preferences toward digital wallets and intensifying competition in premium cards could challenge American Express’s growth outlook in the coming years.

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

Another View: The Market Multiple Perspective

While the dominant narrative points to American Express trading above its estimated fair value, comparing its price-to-earnings ratio of 24.1x to peers and the Consumer Finance industry average of 10.2x shows a clear premium. Even when weighed against its fair ratio of 19.9x, the stock appears expensive, suggesting valuation risk if sentiment shifts. Could strong fundamentals justify this premium, or are expectations simply running too far ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own American Express Narrative

If you want a different take or prefer doing your own digging, it's easy to dive in and shape your own view with fresh data. 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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