Buffett's Successor Reaffirms Long-Term Holding Strategy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy AXP?
Source: Fool
- Long-Term Holding Commitment: Berkshire Hathaway's new CEO Greg Abel stated in his letter to shareholders that the company expects to maintain concentration in core holdings like Apple, American Express, Coca-Cola, and Moody's unless there are 'fundamental changes in long-term economic prospects,' indicating a steadfast long-term investment strategy.
- American Express Investment Returns: Berkshire owns 22% of American Express at a cost basis of $1.29 billion, with a market value of $56.1 billion at the time of the shareholder letter, highlighting the substantial return potential of this investment, which yielded $479 million in dividends last year, exceeding the total investment cost in less than three years.
- Strong Revenue Growth: American Express collected nearly $10 billion in net card fees in fiscal 2025, an 18% year-over-year increase, with expectations for further growth in fiscal 2026 due to the introduction of an $895 annual fee for the Platinum Card, showcasing its robust growth potential in the financial services sector.
- Shareholder Return Strategy: American Express finished fiscal 2025 with a 10% revenue increase and a 15% rise in adjusted earnings per share, and its strong margins and consistently rising earnings enable regular capital returns to shareholders through stock buybacks and dividend growth, further solidifying Berkshire's investment value.
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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: 300.270
Low
280.00
Averages
379.06
High
425.00
Current: 300.270
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 Maintains Strong Performance Momentum
- Optimistic Earnings Outlook: American Express expects earnings per share to range between $17.30 and $17.90 for 2026, implying over 14% year-over-year growth, indicating the company's sustained appeal among high-spending consumers and strong market demand.
- Significant Revenue Growth: In 2025, American Express generated total revenue of $72.2 billion, a 10% year-over-year increase, demonstrating the resilience of its core business and strong market performance, further solidifying its leadership position in the credit card industry.
- Shareholder Return Strategy: The company returned $7.6 billion to shareholders in 2025, with $2.3 billion through dividends and $5.3 billion via share repurchases, reflecting its strong cash flow and commitment to shareholders while enhancing earnings per share.
- Card Refresh Strategy: American Express significantly upgraded its Platinum Card, raising the annual fee from $695 to $895 while adding numerous new benefits, which is expected to further drive card fee revenue growth, with net card fees reaching $10 billion in 2025, an 18% year-over-year increase.
See More
Buffett's Successor Reaffirms Long-Term Holding Strategy
- Long-Term Holding Commitment: Berkshire Hathaway's new CEO Greg Abel stated in his letter to shareholders that the company expects to maintain concentration in core holdings like Apple, American Express, Coca-Cola, and Moody's unless there are 'fundamental changes in long-term economic prospects,' indicating a steadfast long-term investment strategy.
- American Express Investment Returns: Berkshire owns 22% of American Express at a cost basis of $1.29 billion, with a market value of $56.1 billion at the time of the shareholder letter, highlighting the substantial return potential of this investment, which yielded $479 million in dividends last year, exceeding the total investment cost in less than three years.
- Strong Revenue Growth: American Express collected nearly $10 billion in net card fees in fiscal 2025, an 18% year-over-year increase, with expectations for further growth in fiscal 2026 due to the introduction of an $895 annual fee for the Platinum Card, showcasing its robust growth potential in the financial services sector.
- Shareholder Return Strategy: American Express finished fiscal 2025 with a 10% revenue increase and a 15% rise in adjusted earnings per share, and its strong margins and consistently rising earnings enable regular capital returns to shareholders through stock buybacks and dividend growth, further solidifying Berkshire's investment value.
See More
American Express Demonstrates Strong Financial Performance
- Significant Shareholder Returns: American Express reported a net income of $10.7 billion for fiscal 2025, reflecting a 15% year-over-year increase, indicating the company's ability to enhance profitability while returning more value to shareholders through stock buybacks and dividends.
- Superior Credit Risk Management: With relatively low net write-off rates, American Express demonstrates strong credit risk management in its card issuance, and the introduction of the $895 annual fee Platinum Card in fiscal 2026 is expected to further boost revenue growth.
- Diversified Revenue Streams: The company generated $37.4 billion in discount revenue in fiscal 2025, establishing itself as a dominant player in merchant transaction processing, while net interest income also provides substantial cash flow to the business.
- Long-term Investment Value: With a price-to-earnings ratio of 19.5, below the 10-year median of 17.8, American Express presents a reasonable investment opportunity in the current market, making it suitable for long-term holding to achieve stable returns.
See More
Investment Opportunities Amid Market Volatility
- Fluence Energy's Market Reaction: Fluence Energy's stock has fallen 51% from its February peak, yet management asserts that the disappointing Q1 gross margins will be recovered from $20 million in additional costs due to international project scope changes, indicating strong underlying business fundamentals.
- Massive Backlog: Fluence currently boasts a backlog of $5.5 billion, fully covering its FY2026 revenue guidance, and ongoing discussions with major data center operators could convert into significant orders in the near future.
- American Express's Resilient Performance: Despite the financial sector's overall decline of 11.2%, American Express maintains a low delinquency rate of 1.3% in Q4, showcasing its exceptional credit management capabilities and solid business model.
- Future Growth Expectations: American Express anticipates revenue growth of 9% to 10% for FY2026, with EPS projected to reach $17.30 to $17.90, reflecting a 12.5% to 16.4% increase from FY2025, alongside a 16% dividend increase, bolstering investor confidence.
See More
Cyclical Slowdown in Financial Sector Presents Buying Opportunity for American Express Investors
- Market Volatility Impact: The financial sector is down 11.2% in 2026, with American Express, Visa, and Mastercard experiencing even larger declines, reflecting market concerns over short-term economic slowdowns, yet long-term growth drivers remain intact.
- American Express Risk Management Advantage: In Q4 2025, American Express reported a delinquency rate of only 1.3%, significantly lower than the average 4.1% for commercial banks, showcasing its exceptional risk management capabilities within its affluent customer base, which helps maintain a high-quality loan pool.
- Future Growth Expectations: American Express anticipates revenue growth of 9% to 10% for FY 2026, with expected EPS ranging from $17.30 to $17.90, representing a 12.5% to 16.4% increase from $15.38 in FY 2025, indicating strong profitability and growth potential.
- Dividend Increase and Buybacks: In March, American Express announced a 16% increase in its quarterly dividend to $0.95 per share, yielding 1.3%, demonstrating the company's commitment to returning value to shareholders while maintaining robust cash flow, thereby enhancing investor confidence.
See More
American Express Stock Pullback Presents Buying Opportunity
- Optimistic Earnings Outlook: American Express expects earnings per share for 2026 to range between $17.30 and $17.90, implying over 14% year-over-year growth, indicating the company's ability to maintain strong profitability amidst market pressures, which boosts investor confidence.
- Capital Return Strategy: In 2025, American Express returned $7.6 billion to shareholders, with $2.3 billion through dividends and $5.3 billion via share repurchases, demonstrating the company's commitment to generating excess capital while enhancing shareholder value.
- High-End Consumer Strategy: By raising the Platinum Card's annual fee from $695 to $895 and adding numerous new perks, the company successfully attracted high-spending consumers, achieving $10 billion in net card fees in 2025, an 18% year-over-year increase, further solidifying its market position.
- Increased Valuation Appeal: With shares trading around $300 and a price-to-earnings ratio of about 17 times the $17.60 midpoint of management's earnings guidance, the stock is not cheap but remains attractive given the company's double-digit earnings growth and a recent 16% dividend increase, justifying its current valuation.
See More
American Express Maintains Strong Performance Momentum
- Optimistic Earnings Outlook: American Express expects earnings per share to range between $17.30 and $17.90 for 2026, implying over 14% year-over-year growth, indicating the company's sustained appeal among high-spending consumers and strong market demand.
- Significant Revenue Growth: In 2025, American Express generated total revenue of $72.2 billion, a 10% year-over-year increase, demonstrating the resilience of its core business and strong market performance, further solidifying its leadership position in the credit card industry.
- Shareholder Return Strategy: The company returned $7.6 billion to shareholders in 2025, with $2.3 billion through dividends and $5.3 billion via share repurchases, reflecting its strong cash flow and commitment to shareholders while enhancing earnings per share.
- Card Refresh Strategy: American Express significantly upgraded its Platinum Card, raising the annual fee from $695 to $895 while adding numerous new benefits, which is expected to further drive card fee revenue growth, with net card fees reaching $10 billion in 2025, an 18% year-over-year increase.
See More
Buffett's Successor Reaffirms Long-Term Holding Strategy
- Long-Term Holding Commitment: Berkshire Hathaway's new CEO Greg Abel stated in his letter to shareholders that the company expects to maintain concentration in core holdings like Apple, American Express, Coca-Cola, and Moody's unless there are 'fundamental changes in long-term economic prospects,' indicating a steadfast long-term investment strategy.
- American Express Investment Returns: Berkshire owns 22% of American Express at a cost basis of $1.29 billion, with a market value of $56.1 billion at the time of the shareholder letter, highlighting the substantial return potential of this investment, which yielded $479 million in dividends last year, exceeding the total investment cost in less than three years.
- Strong Revenue Growth: American Express collected nearly $10 billion in net card fees in fiscal 2025, an 18% year-over-year increase, with expectations for further growth in fiscal 2026 due to the introduction of an $895 annual fee for the Platinum Card, showcasing its robust growth potential in the financial services sector.
- Shareholder Return Strategy: American Express finished fiscal 2025 with a 10% revenue increase and a 15% rise in adjusted earnings per share, and its strong margins and consistently rising earnings enable regular capital returns to shareholders through stock buybacks and dividend growth, further solidifying Berkshire's investment value.
See More
American Express Demonstrates Strong Financial Performance
- Significant Shareholder Returns: American Express reported a net income of $10.7 billion for fiscal 2025, reflecting a 15% year-over-year increase, indicating the company's ability to enhance profitability while returning more value to shareholders through stock buybacks and dividends.
- Superior Credit Risk Management: With relatively low net write-off rates, American Express demonstrates strong credit risk management in its card issuance, and the introduction of the $895 annual fee Platinum Card in fiscal 2026 is expected to further boost revenue growth.
- Diversified Revenue Streams: The company generated $37.4 billion in discount revenue in fiscal 2025, establishing itself as a dominant player in merchant transaction processing, while net interest income also provides substantial cash flow to the business.
- Long-term Investment Value: With a price-to-earnings ratio of 19.5, below the 10-year median of 17.8, American Express presents a reasonable investment opportunity in the current market, making it suitable for long-term holding to achieve stable returns.
See More
Investment Opportunities Amid Market Volatility
- Fluence Energy's Market Reaction: Fluence Energy's stock has fallen 51% from its February peak, yet management asserts that the disappointing Q1 gross margins will be recovered from $20 million in additional costs due to international project scope changes, indicating strong underlying business fundamentals.
- Massive Backlog: Fluence currently boasts a backlog of $5.5 billion, fully covering its FY2026 revenue guidance, and ongoing discussions with major data center operators could convert into significant orders in the near future.
- American Express's Resilient Performance: Despite the financial sector's overall decline of 11.2%, American Express maintains a low delinquency rate of 1.3% in Q4, showcasing its exceptional credit management capabilities and solid business model.
- Future Growth Expectations: American Express anticipates revenue growth of 9% to 10% for FY2026, with EPS projected to reach $17.30 to $17.90, reflecting a 12.5% to 16.4% increase from FY2025, alongside a 16% dividend increase, bolstering investor confidence.
See More
Cyclical Slowdown in Financial Sector Presents Buying Opportunity for American Express Investors
- Market Volatility Impact: The financial sector is down 11.2% in 2026, with American Express, Visa, and Mastercard experiencing even larger declines, reflecting market concerns over short-term economic slowdowns, yet long-term growth drivers remain intact.
- American Express Risk Management Advantage: In Q4 2025, American Express reported a delinquency rate of only 1.3%, significantly lower than the average 4.1% for commercial banks, showcasing its exceptional risk management capabilities within its affluent customer base, which helps maintain a high-quality loan pool.
- Future Growth Expectations: American Express anticipates revenue growth of 9% to 10% for FY 2026, with expected EPS ranging from $17.30 to $17.90, representing a 12.5% to 16.4% increase from $15.38 in FY 2025, indicating strong profitability and growth potential.
- Dividend Increase and Buybacks: In March, American Express announced a 16% increase in its quarterly dividend to $0.95 per share, yielding 1.3%, demonstrating the company's commitment to returning value to shareholders while maintaining robust cash flow, thereby enhancing investor confidence.
See More
American Express Stock Pullback Presents Buying Opportunity
- Optimistic Earnings Outlook: American Express expects earnings per share for 2026 to range between $17.30 and $17.90, implying over 14% year-over-year growth, indicating the company's ability to maintain strong profitability amidst market pressures, which boosts investor confidence.
- Capital Return Strategy: In 2025, American Express returned $7.6 billion to shareholders, with $2.3 billion through dividends and $5.3 billion via share repurchases, demonstrating the company's commitment to generating excess capital while enhancing shareholder value.
- High-End Consumer Strategy: By raising the Platinum Card's annual fee from $695 to $895 and adding numerous new perks, the company successfully attracted high-spending consumers, achieving $10 billion in net card fees in 2025, an 18% year-over-year increase, further solidifying its market position.
- Increased Valuation Appeal: With shares trading around $300 and a price-to-earnings ratio of about 17 times the $17.60 midpoint of management's earnings guidance, the stock is not cheap but remains attractive given the company's double-digit earnings growth and a recent 16% dividend increase, justifying its current valuation.
See More
