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1. Company Snapshot

1.a. Company Description

American Express Company, together with its subsidiaries, provides charge and credit payment card products, and travel-related services worldwide.The company operates through three segments: Global Consumer Services Group, Global Commercial Services, and Global Merchant and Network Services.Its products and services include payment and financing products; network services; accounts payable expense management products and services; and travel and lifestyle services.


The company's products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs.It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams, and direct response advertising.American Express Company was founded in 1850 and is headquartered in New York, New York.

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1.b. Last Insights on AXP

American Express' recent performance was driven by strong earnings growth, fueled by record network volumes and resilient card fee income. The company's Q3 2025 results showed a 19% EPS jump and double-digit revenue growth. Its focus on premium customers and robust demand for financial products highlight operational strength. Analysts increased forecasts after the upbeat Q3 earnings, citing the company's pricing power, international expansion, and success with younger demographics. AXP's resilient business model and high-quality customers support its premium valuation.

1.c. Company Highlights

2. American Express Delivers Strong 2025 Performance

American Express reported a robust 2025 performance, with revenue growth of 10% to a record $72 billion and EPS of $15.38, up 15% excluding a gain. The company's card fee growth was 18%, reaching a record $10 billion for the year. For 2026, American Express expects revenue growth of 9-10% and EPS of $17.30-$17.90. The actual EPS for the quarter was $3.53, slightly below estimates of $3.54. The company's strong performance was driven by healthy spending and loan growth, with significant investments in marketing and technology.

Publication Date: Feb -02

📋 Highlights
  • Revenue & EPS Growth: 2025 revenue hit record $72B (+10%), EPS rose 15% to $15.38 excluding a gain.
  • 2026 Guidance: Expects 9-10% revenue growth, $17.30-$17.90 EPS, and a 16% dividend hike to 95¢/share.
  • Marketing & Tech Investments: Spent $6.3B on marketing (+75% vs. 2019) and $5B annually on tech to drive growth.
  • Premium Product Shift: Platinum/Gold card acquisition declined by 100K YoY, but revenue growth prioritized over card count.
  • Commercial Services Expansion: Acquired Center to strengthen small business offerings, targeting 9% US consumer billed business growth in 2026.

Revenue Growth Drivers

The company's premium products drove strong engagement, with a 30% increase in travel bookings and 20% increase in restaurant spending. American Express saw significant growth in its platinum and gold cards, with the average age of new customers on the US consumer platinum card at 33 and 29 on the US consumer gold card. The company's focus on acquiring revenue rather than just cards resulted in a 100,000 year-over-year decrease in cards acquired, but revenue targets and return on investment targets are being met.

Valuation and Dividend

With a P/E Ratio of 22.37 and ROE of 33.43%, American Express' valuation multiples indicate a premium for its strong brand and premium product offerings. The company's decision to increase its quarterly dividend by 16% to 95¢ per share continues its track record of strong capital returns to shareholders. The Dividend Yield is currently at 0.93%, which is relatively modest compared to its historical average.

Outlook and Risks

American Express' 2026 outlook poses risks, primarily macroeconomic or political, rather than competitive dynamics. The company expects US consumer billed business growth to remain strong, with a 9% growth rate, driven by premium products like platinum and gold. The company's commercial services saw a slowdown, particularly in the middle market, but small business remains strong. American Express is well-positioned in the small business arena, with a recent acquisition of Center enhancing expense management offerings.

Investment Strategy

The company is focused on its premium products, building its commercial position, and expanding internationally. American Express will continue to refresh products, enhance technology, and leverage partnerships to drive value for card members. The company's data analytics platform, launching in 2027, will utilize AI and large language models to enhance card member engagement, create targeted offers, and drive marketing efficiency.

3. NewsRoom

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American Express challenges Apple for No. 1 slot in Berkshire's portfolio

Jan -31

Source: cnbc.com

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Market Today: Warsh Pick Roils Metals; GameStop, AmEx, Disney

Jan -30

Source: gurufocus.com

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American Express Counts on Millennials to Power Spending Through 2026

Jan -30

Source: pymnts.com

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American Express Co (AXP) Q4 2025 Earnings Call Highlights: Record Revenue and Strategic Shifts Propel Growth

Jan -30

Source: gurufocus.com

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Visa, Amex Results Point to a Strong Holiday Season for Retailers

Jan -30

Source: barrons.com

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AXP Q4 Earnings Lag Estimates on Rising Customer Engagement Costs

Jan -30

Source: zacks.com

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American Express, credit card provider to the wealthy, wants even more high spenders

Jan -30

Source: cnbc.com

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American Express Company (AXP) Q4 2025 Earnings Call Transcript

Jan -30

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.67%)

6. Segments

U.S. Consumer Services (USCS)

Expected Growth: 7.5%

Strong brand recognition, increasing consumer spending, and growing adoption of digital payment methods drive growth in American Express’ U.S. Consumer Services segment.

Commercial Services (CS)

Expected Growth: 8.2%

American Express Company's Commercial Services segment is driven by increasing demand for digital payment solutions, growing adoption of cashless transactions, and expansion into new markets, particularly in the Asia-Pacific region.

International Card Services (ICS)

Expected Growth: 7.5%

American Express' international card services growth is driven by increasing travel, cross-border transactions, and digital payments adoption, as well as strategic partnerships and expansion in emerging markets.

Global Merchant and Network Services (GMNS)

Expected Growth: 7.4%

American Express’ Global Merchant and Network Services benefit from increasing online transactions, growth in e-commerce, and rising demand for digital payment solutions, driving segment growth.

Corporate and Other

Expected Growth: 4.5%

American Express' Corporate and Other operations are expected to grow due to increasing adoption of digital payments, expanding merchant network, and growing demand for premium services.

7. Detailed Products

Charge and Credit Cards

American Express offers a range of charge and credit cards that provide rewards, benefits, and financial flexibility to individuals and businesses.

Travel Services

American Express provides travel-related services, including booking and planning tools, travel insurance, and concierge services.

Merchant Services

American Express offers payment processing and merchant services to businesses, enabling them to accept American Express cards and other payment methods.

Corporate Payments

American Express provides corporate payment solutions, including virtual cards, payment processing, and expense management tools.

Digital Payments

American Express offers digital payment solutions, including mobile payments, online payments, and contactless payments.

Business Financing

American Express provides business financing solutions, including working capital, invoice financing, and equipment financing.

FX International Payments

American Express offers foreign exchange and international payment services, enabling businesses to make and receive international payments.

8. American Express Company's Porter Forces

Forces Ranking

Threat Of Substitutes

American Express faces moderate threat from substitutes such as digital payment methods like PayPal, Apple Pay, and Google Wallet. However, its strong brand recognition and rewards program help to mitigate this threat.

Bargaining Power Of Customers

American Express customers have high bargaining power due to the availability of alternative payment methods and the ease of switching to competitors. This forces the company to focus on customer retention and loyalty programs.

Bargaining Power Of Suppliers

American Express has a strong negotiating position with its suppliers, including merchants and financial institutions. This allows the company to maintain favorable terms and minimize costs.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the payment processing industry, including regulatory hurdles and the need for significant capital investments.

Intensity Of Rivalry

The payment processing industry is highly competitive, with American Express competing against established players like Visa, Mastercard, and Discover. This intense rivalry drives innovation and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.66%
Debt Cost 9.96%
Equity Weight 36.34%
Equity Cost 9.96%
WACC 9.96%
Leverage 175.21%

11. Quality Control: American Express Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Barings BDC

A-Score: 6.8/10

Value: 6.4

Growth: 4.7

Quality: 6.1

Yield: 10.0

Momentum: 3.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Discover

A-Score: 6.2/10

Value: 6.6

Growth: 7.8

Quality: 7.8

Yield: 3.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Visa

A-Score: 5.9/10

Value: 0.8

Growth: 7.8

Quality: 8.8

Yield: 1.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Amex

A-Score: 5.8/10

Value: 3.0

Growth: 6.3

Quality: 6.9

Yield: 2.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Capital One

A-Score: 5.5/10

Value: 4.1

Growth: 6.3

Quality: 5.4

Yield: 3.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
PayPal

A-Score: 4.9/10

Value: 6.2

Growth: 7.6

Quality: 7.2

Yield: 0.0

Momentum: 2.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

352.83$

Current Price

352.83$

Potential

-0.00%

Expected Cash-Flows