Buffett's Investment Success with American Express
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 20 2026
0mins
Source: Fool
- Shareholder Equity Growth: American Express has successfully increased Buffett's ownership from 10% to 22% by 2025 through consistent share buybacks and dividends, enhancing shareholder returns and strengthening the company's market position.
- Strong Profitability: American Express has maintained a long-term return on equity of 20%-30%, supported by its premium customer base and strong spending volumes, which provide solid backing for revenue and profit growth.
- Efficient Capital Allocation: Unlike many companies, American Express has effectively reduced its share count, avoiding shareholder dilution, which has allowed Buffett's investment cost to decrease from $1.4 billion in 1995 to $1.3 billion in 2025, showcasing its efficient capital allocation.
- Long-term Investment Value: While American Express is no longer a hidden investment opportunity, its strong cash flows and ongoing share buybacks still position it for solid per-share earnings growth, making it attractive for long-term 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: 348.000
Low
280.00
Averages
379.06
High
425.00
Current: 348.000
Low
280.00
Averages
379.06
High
425.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
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.
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See More
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- Brand Partnership Expansion: American Express has established partnerships with over 20 venues globally, with lounges in several locations, enhancing customer experience while leveraging collaborations with high-profile events to further strengthen brand influence and customer engagement.
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- Coinbase's Dual Role: Coinbase earns more from USDC than Circle does and is a participant in Open USD, with its agreement with Circle expiring in August, positioning Coinbase advantageously within the new stablecoin ecosystem and possibly affecting its future revenue streams.
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See More
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- Price Volatility Analysis: AXP shares have a 52-week low of $288.34 and a high of $387.49, with the latest trade at $339.35, indicating notable price fluctuations within this range.
- ETF Composition Analysis: According to ETF Finder, AXP constitutes 6.22% of the Amplify Digital Payments ETF (Symbol: IPAY), which is up approximately 0.5% on the day, reflecting positive market sentiment.
- Market Performance Observation: In Wednesday trading, American Express shares rose about 0.6%, indicating investor optimism regarding the company's future performance.
See More
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- Redemption Innovation: American Express launches Pay with Points with Apple Pay, allowing eligible Card Members to redeem points more flexibly, enhancing user experience and boosting customer loyalty.
- Competitive Market Positioning: By expanding redemption options, American Express aims to attract more consumers, particularly younger generations, further solidifying its position in the financial services market.
- Increased User Convenience: The new feature enables users to directly use points when paying with Apple Pay, streamlining the payment process and expected to increase transaction frequency and customer satisfaction.
- Brand Image Enhancement: This initiative not only demonstrates American Express's commitment to innovation but may also attract more high-value customers, driving long-term business growth and market share expansion.
See More
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- Goldman Sachs Downgrade: Oppenheimer downgraded Goldman Sachs from hold to sell, citing limited upside in current valuations for investment banks, although analysts remain optimistic about Goldman’s trading and deal-making strength ahead of earnings, suggesting robust revenue prospects.
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