American Express Thrives Amid Interest Rate Fluctuations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AXP?
Source: Fool
- Interest Rate Impact: American Express benefits from its credit card transaction fee model in both high-interest and high-inflation environments, with projected revenue growth of 9% to 10% in 2026, demonstrating resilience amid economic fluctuations.
- Strong Customer Base: The company added 3.1 million cards last quarter, indicating the effectiveness of its membership model targeting high-income consumers, which enhances customer loyalty and reduces competitive risks.
- Robust Profitability: Expected earnings per share (EPS) for 2026 are projected between $17.30 and $17.90, showcasing the company's profitability and risk resilience in uncertain economic conditions.
- Inflation Protection Mechanism: As inflation rises, American Express's revenue growth will accelerate, further solidifying its market leadership and making it a premium choice for investors.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise
21 Analyst Rating
8 Buy
12 Hold
1 Sell
Moderate Buy
Current: 314.080
Low
280.00
Averages
379.06
High
425.00
Current: 314.080
Low
280.00
Averages
379.06
High
425.00
About AXP
American Express Company is a global payments and premium lifestyle brand powered by technology. Its card-issuing, merchant-acquiring and card network businesses offer products and services to a broad range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its range of products and services includes credit and charge cards and complementary products and services, including travel, dining, lifestyle and expense management products and services; banking and other payment and financing products and services, including deposits and non-card lending; merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services, and network services. These products and services are offered through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers, and business partners.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
American Express Thrives Amid Interest Rate Fluctuations
- Interest Rate Impact: American Express benefits from its credit card transaction fee model in both high-interest and high-inflation environments, with projected revenue growth of 9% to 10% in 2026, demonstrating resilience amid economic fluctuations.
- Strong Customer Base: The company added 3.1 million cards last quarter, indicating the effectiveness of its membership model targeting high-income consumers, which enhances customer loyalty and reduces competitive risks.
- Robust Profitability: Expected earnings per share (EPS) for 2026 are projected between $17.30 and $17.90, showcasing the company's profitability and risk resilience in uncertain economic conditions.
- Inflation Protection Mechanism: As inflation rises, American Express's revenue growth will accelerate, further solidifying its market leadership and making it a premium choice for investors.
See More
American Express: Significant Growth Potential
- Enhanced Shareholder Returns: American Express boasts a dividend yield of 1.15%, which, while modest, has seen an average annual growth of 17% over the past five years, demonstrating the company's commitment to returning value to shareholders and boosting investor confidence.
- Robust Performance Growth: The company achieved a 10% year-over-year revenue increase in 2025, alongside double-digit earnings per share (EPS) growth, indicating its ability to maintain strong performance in a competitive market and further solidifying its market position.
- Long-Term Investment Strategy: CEO Stephen Squeri noted that while the near-term revenue growth expectations for 2026 were not raised, the company plans to increase investments in marketing and technology to seize long-term growth opportunities, reflecting confidence in future development.
- Buffett's Endorsement: American Express is the second-largest holding of Warren Buffett's Berkshire Hathaway, valued at $56 billion and representing 22% of the company's total value, which not only reflects its solid financial standing but also provides additional confidence for investors.
See More
Earnings Analysis: Bank of America vs American Express
- Strong Earnings for AXP: American Express reported an 11% year-over-year revenue increase and an 18% jump in earnings per share for Q1, despite a 4% stock drop attributed to increased marketing and tech investments; its forward P/E of 18 suggests a buying opportunity, with potential for recovery from the current dip.
- BAC's Impressive Performance: Bank of America saw a 7% revenue rise and a 25% surge in earnings per share in Q1, with net interest income up 9% and investment banking revenue increasing by 21%, reflecting strong performance in the M&A sector, while its stock gained about 10% over the past month.
- Improved Credit Quality: Bank of America reported significant improvements in credit quality, with provisions for credit losses and net charge-offs decreasing, and an efficiency ratio improved by 170 basis points to 61%, indicating enhanced cost control in revenue generation.
- Analyst Rating Discrepancies: Wall Street shows greater bullishness towards Bank of America, with 81% of analysts recommending a buy and a median price target of $61, suggesting a 17% upside, while only 45% rate American Express as a buy with a target of $360, indicating a 15% potential gain.
See More
American Express Raises Platinum Card Fee, Setting Industry Precedent
- Industry Pricing Signal: American Express raised the annual fee for its Platinum Card from $695 to $895 in late 2025 without losing customers, potentially prompting competitors to follow suit and reshaping the pricing structure across the credit card industry.
- Enhanced Customer Value: The new fee includes over $3,500 in annual lifestyle benefits, such as new credits with Resy, lululemon, and Uber One, aimed at maintaining customer loyalty despite a $300 increase in five years, emphasizing the importance of perceived value.
- Revenue Growth Trend: Revenue from Platinum cardholders grew by 6% in Q1, primarily from tenured customers, indicating that the pricing strategy effectively attracted high-value clients and boosted overall earnings.
- Young Consumer Preferences: Analysts note that younger generations are more comfortable with credit card fees, viewing them as subscription-like products that deliver value through travel, dining, and entertainment experiences, supporting American Express's pricing strategy and potentially leading the industry towards premium, high-fee credit cards.
See More
Strong Profit Performance Among S&P 500 Financial Firms
- Strong Profitability: In the latest earnings season, 15 out of 19 financial companies in the S&P 500 exceeded EPS estimates, indicating robust profitability, although revenue growth was uneven across the sector.
- American Express Outperformance: American Express (AXP) reported both revenue and EPS beats, driven by strong card spending and resilient demand from premium customers, signaling continued consumer confidence.
- Blackstone's Strong Returns: Blackstone (BX) posted a Q1 distributable EPS of $1.36, surpassing the consensus of $1.34, with Infrastructure and Tactical Opportunities delivering the strongest returns, despite negative performances in Liquid Credit and Opportunistic Real Estate strategies.
- Synchrony Financial's Shareholder Returns: Synchrony Financial (SYF) exceeded Wall Street earnings expectations in Q1 and announced a $6.5 billion stock repurchase authorization along with a planned 13% dividend increase to $0.34 per share starting Q3 2026, reflecting the company's confidence in future growth.
See More
Smead Value Fund's Q1 2026 Investment Insights
- Key Position Increases: In Q1 2026, Smead Value Fund significantly increased its stake in UnitedHealth Group Inc by 53,112 shares, totaling 320,978 shares, representing a 19.83% increase, impacting the portfolio by 0.37% with a total value of $94,133,220.
- Credit Acceptance Corp Boost: The fund also added 30,907 shares of Credit Acceptance Corp, bringing total holdings to 194,269 shares, an 18.92% increase, with a total value of $91,924,210, indicating strong confidence in the company.
- Major Position Reductions: Among 25 stocks, American Express Co saw a reduction of 110,622 shares, resulting in a 16.6% decrease, impacting the portfolio by 0.97%, with an average trading price of $361.63 during the quarter and a -12.89% return over the past three months.
- JPMorgan Chase Cutback: JPMorgan Chase & Co was reduced by 104,415 shares, leading to a 21.39% decrease, impacting the portfolio by 0.79%, with an average price of $313.32 during the quarter and a year-to-date return of -3.40%.
See More
American Express Thrives Amid Interest Rate Fluctuations
- Interest Rate Impact: American Express benefits from its credit card transaction fee model in both high-interest and high-inflation environments, with projected revenue growth of 9% to 10% in 2026, demonstrating resilience amid economic fluctuations.
- Strong Customer Base: The company added 3.1 million cards last quarter, indicating the effectiveness of its membership model targeting high-income consumers, which enhances customer loyalty and reduces competitive risks.
- Robust Profitability: Expected earnings per share (EPS) for 2026 are projected between $17.30 and $17.90, showcasing the company's profitability and risk resilience in uncertain economic conditions.
- Inflation Protection Mechanism: As inflation rises, American Express's revenue growth will accelerate, further solidifying its market leadership and making it a premium choice for investors.
See More
American Express: Significant Growth Potential
- Enhanced Shareholder Returns: American Express boasts a dividend yield of 1.15%, which, while modest, has seen an average annual growth of 17% over the past five years, demonstrating the company's commitment to returning value to shareholders and boosting investor confidence.
- Robust Performance Growth: The company achieved a 10% year-over-year revenue increase in 2025, alongside double-digit earnings per share (EPS) growth, indicating its ability to maintain strong performance in a competitive market and further solidifying its market position.
- Long-Term Investment Strategy: CEO Stephen Squeri noted that while the near-term revenue growth expectations for 2026 were not raised, the company plans to increase investments in marketing and technology to seize long-term growth opportunities, reflecting confidence in future development.
- Buffett's Endorsement: American Express is the second-largest holding of Warren Buffett's Berkshire Hathaway, valued at $56 billion and representing 22% of the company's total value, which not only reflects its solid financial standing but also provides additional confidence for investors.
See More
Earnings Analysis: Bank of America vs American Express
- Strong Earnings for AXP: American Express reported an 11% year-over-year revenue increase and an 18% jump in earnings per share for Q1, despite a 4% stock drop attributed to increased marketing and tech investments; its forward P/E of 18 suggests a buying opportunity, with potential for recovery from the current dip.
- BAC's Impressive Performance: Bank of America saw a 7% revenue rise and a 25% surge in earnings per share in Q1, with net interest income up 9% and investment banking revenue increasing by 21%, reflecting strong performance in the M&A sector, while its stock gained about 10% over the past month.
- Improved Credit Quality: Bank of America reported significant improvements in credit quality, with provisions for credit losses and net charge-offs decreasing, and an efficiency ratio improved by 170 basis points to 61%, indicating enhanced cost control in revenue generation.
- Analyst Rating Discrepancies: Wall Street shows greater bullishness towards Bank of America, with 81% of analysts recommending a buy and a median price target of $61, suggesting a 17% upside, while only 45% rate American Express as a buy with a target of $360, indicating a 15% potential gain.
See More
American Express Raises Platinum Card Fee, Setting Industry Precedent
- Industry Pricing Signal: American Express raised the annual fee for its Platinum Card from $695 to $895 in late 2025 without losing customers, potentially prompting competitors to follow suit and reshaping the pricing structure across the credit card industry.
- Enhanced Customer Value: The new fee includes over $3,500 in annual lifestyle benefits, such as new credits with Resy, lululemon, and Uber One, aimed at maintaining customer loyalty despite a $300 increase in five years, emphasizing the importance of perceived value.
- Revenue Growth Trend: Revenue from Platinum cardholders grew by 6% in Q1, primarily from tenured customers, indicating that the pricing strategy effectively attracted high-value clients and boosted overall earnings.
- Young Consumer Preferences: Analysts note that younger generations are more comfortable with credit card fees, viewing them as subscription-like products that deliver value through travel, dining, and entertainment experiences, supporting American Express's pricing strategy and potentially leading the industry towards premium, high-fee credit cards.
See More
Strong Profit Performance Among S&P 500 Financial Firms
- Strong Profitability: In the latest earnings season, 15 out of 19 financial companies in the S&P 500 exceeded EPS estimates, indicating robust profitability, although revenue growth was uneven across the sector.
- American Express Outperformance: American Express (AXP) reported both revenue and EPS beats, driven by strong card spending and resilient demand from premium customers, signaling continued consumer confidence.
- Blackstone's Strong Returns: Blackstone (BX) posted a Q1 distributable EPS of $1.36, surpassing the consensus of $1.34, with Infrastructure and Tactical Opportunities delivering the strongest returns, despite negative performances in Liquid Credit and Opportunistic Real Estate strategies.
- Synchrony Financial's Shareholder Returns: Synchrony Financial (SYF) exceeded Wall Street earnings expectations in Q1 and announced a $6.5 billion stock repurchase authorization along with a planned 13% dividend increase to $0.34 per share starting Q3 2026, reflecting the company's confidence in future growth.
See More
Smead Value Fund's Q1 2026 Investment Insights
- Key Position Increases: In Q1 2026, Smead Value Fund significantly increased its stake in UnitedHealth Group Inc by 53,112 shares, totaling 320,978 shares, representing a 19.83% increase, impacting the portfolio by 0.37% with a total value of $94,133,220.
- Credit Acceptance Corp Boost: The fund also added 30,907 shares of Credit Acceptance Corp, bringing total holdings to 194,269 shares, an 18.92% increase, with a total value of $91,924,210, indicating strong confidence in the company.
- Major Position Reductions: Among 25 stocks, American Express Co saw a reduction of 110,622 shares, resulting in a 16.6% decrease, impacting the portfolio by 0.97%, with an average trading price of $361.63 during the quarter and a -12.89% return over the past three months.
- JPMorgan Chase Cutback: JPMorgan Chase & Co was reduced by 104,415 shares, leading to a 21.39% decrease, impacting the portfolio by 0.79%, with an average price of $313.32 during the quarter and a year-to-date return of -3.40%.
See More
