Key Stats for American Express Stock
- Price Change for $AXP stock: 7%
- Current Share Price: $347
- 52-Week High: $349
- $AXP Stock Price Target: $334
What Happened?
American Express (AXP) stock jumped more than 7% on Friday, reaching a fresh all-time high after the company crushed third-quarter expectations driven by wealthy consumers who kept spending despite economic uncertainty.
The credit card giant reported earnings of $4.14 per share on record revenue of $18.43 billion, topping analyst forecasts on both metrics. Revenue climbed 11% year-over-year while earnings surged 19%.
Card member spending accelerated to 8% growth on an FX-adjusted basis, about two percentage points faster than the second quarter.
The Q3 results were driven by:
- Strong retail spending, which jumped 12%, plus a rebound in travel and entertainment.
- Restaurant spending, AmEx’s largest travel category, rose 9%.
- Premium travel bookings showed particular strength, with front-of-cabin airline ticket spending up 14%.
CEO Stephen Squeri credited the blowout results partly to the launch of refreshed U.S. Consumer and Business Platinum cards in September.
The updated premium cards came loaded with enhanced benefits across travel, dining, wellness, and lifestyle categories.
New Platinum account acquisitions doubled compared to pre-refresh levels. Within the first three weeks, members made over 500,000 requests for the new mirror card design and showed very strong engagement with the latest benefits.
Based on the strong performance through nine months, American Express raised its full-year guidance.
The company now expects revenue growth of 9% to 10%, up from the prior 8% to 10% range. More significantly, AmEx boosted the bottom end of its earnings guidance to $15.20 to $15.50 per share from $15.00 to $15.50 previously, which implies EPS growth approaching 20% for the full year.
Credit quality remained exceptional despite concerns about consumer health elsewhere in the industry.
The net write-off rate held steady at 1.9% year-over-year, and delinquency rates stayed below 2019 levels for both consumer and small business customers.
CFO Christophe Le Caillec noted the credit profiles of consumer applicants for the refreshed Platinum card improved dramatically, with average FICO scores up 15 points compared to before the refresh.
The Platinum refresh follows a proven playbook that AmEx has executed over 200 times globally since 2019.
The strategy leverages the company’s premium customer base of 160 million card-accepting merchants worldwide.
AmEx has nearly 5x grown merchant acceptance since 2017, giving members more places to use their cards. The refreshes create a virtuous cycle where enhanced benefits drive engagement, attracting more premium merchants and adding more value to membership.
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What the Market Is Telling Us About AXP Stock
The surge in AXP stock reflects confidence that American Express has figured out something competitors haven’t—how to consistently monetize affluent consumers even in challenging economic environments.
While other card issuers reported deteriorating credit metrics and slowing spending, AmEx delivered accelerating billings growth and credit performance that actually improved sequentially.
The Platinum refresh dynamics are important. Management disclosed that annual card fees are now approaching $10 billion annually and have grown by double digits for 29 consecutive quarters.
The refreshed Platinum carries a higher annual fee, but accounting rules mean the revenue benefit takes roughly two years to fully realize.
Card members receive the enhanced benefits immediately, but they pay the new fee at their renewal anniversary over the next 12 months.
Those fees are then amortized over 12 months. So the full revenue impact peaks about 12 months after the new fee takes effect.
Meanwhile, the costs of enhanced benefits hit immediately as members engage with quarterly credits and upgraded perks. That creates near-term margin pressure, which management has openly acknowledged.
Variable customer engagement costs jumped 14% in the quarter, and the VCE-to-revenue ratio came in at 42%. Management expects this ratio to continue rising over time as the product mix shifts more premium and they invest in value propositions.
The critical question is whether the refresh drives enough incremental spending, retention, and new acquisitions to justify the investment.
Doubling new account acquisitions while improving average credit scores suggests AmEx is expanding its addressable market among affluent consumers.
The company also noted Millennials and Gen Z now account for 36% of total spend, matching Gen X. Younger members transact about 25% more frequently than older cohorts.
International momentum continued with spending up 13% FX-adjusted. Three of AmEx’s five largest markets grew 18% or more, and this geographic diversification reduces reliance on the U.S. consumer and provides multiple growth vectors.
The company’s strategy of expanding merchant acceptance outside the U.S. to 160 million locations creates more utility for cardholders traveling internationally.
Moving the low end of the EPS range up $0.20 suggests confidence without aggressive optimism. Management repeatedly stressed they’re planning for a “stable macroeconomic outlook” rather than improvement.
The conservative posture makes sense given ongoing uncertainty around tariffs, government shutdowns, and broader economic conditions.
The return on equity of 36% and capital return profile remain impressive. AmEx returned $2.9 billion to shareholders in the quarter through $2.3 billion in buybacks and $600 million in dividends. O
ver the past three years, the company has returned roughly 70% of earnings to shareholders while growing the dividend by 58%. That combination of growth and shareholder returns justifies a premium valuation.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
