Why American Express (AXP) Is Up 6.5% After Raising 2025 Guidance on Robust Cardholder Spending

• American Express recently reported strong third-quarter results, raising its full-year 2025 guidance for both earnings and revenue as it continues to see robust growth in cardholder spending and the successful launch of new products like the refreshed Platinum card.
• An interesting development is the company's momentum among younger users, with Millennials and Gen Z now accounting for more than one-third of total card spending, supporting both growth and retention initiatives.
• We'll examine how management's raised full-year guidance sharpens American Express's investment narrative and future earnings expectations.

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American Express Investment Narrative Recap

To be a shareholder in American Express, you need to believe that its premium model, strong customer loyalty, and successful product refreshes, especially among younger, affluent users, will continue to drive consistent earnings and revenue growth. The most important short-term catalyst remains the company’s ability to deliver on its upgraded full-year guidance. The recently announced $2 billion fixed-income offering, however, does not materially impact this catalyst or the biggest risk, which is still intensifying competition in the premium card segment.

Among recent announcements, the company's raised guidance for 2025 earnings and revenue stands out as directly relevant to investor expectations. After a robust third-quarter performance, management now expects 9% to 10% revenue growth and earnings per share between $15.20 and $15.50, signaling confidence in the momentum behind consumer spend and new product launches, which are central to near-term growth prospects.

By contrast, investors should be aware that persistent competition could still pressure profitability if...

Read the full narrative on American Express (it's free!)

American Express is forecast to achieve $85.7 billion in revenue and $13.5 billion in earnings by 2028. This outlook relies on annual revenue growth of 10.6% and a $3.5 billion increase in earnings from the current level of $10.0 billion.

Uncover how American Express' forecasts yield a $338.24 fair value, a 4% downside to its current price.

Exploring Other Perspectives

The most optimistic analysts see international expansion and Millennial-driven spend boosting long-term revenue to US$85.0 billion, but they also warn that digital wallet adoption could mean bigger risks or rewards than consensus expects. This group believes American Express has more profit growth potential than others, highlighting just how much analyst expectations can shift, and raising interesting questions about whether the recent news will cause bullish or cautious opinions to change. It’s worth exploring a range of perspectives.

Explore 8 other fair value estimates on American Express - why the stock might be worth 17% less than the current price!

Build Your Own American Express Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free American Express research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate American Express' overall financial health at a glance.

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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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