Major integrated payments company American Express Company (AXP Quick QuoteAXP - Free Report) is set to report first-quarter 2025 results on April 17, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $3.46 per share on revenues of $17 billion.

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The first-quarter earnings estimate has witnessed no upward estimate revisions over the past seven days against three downward movements. The bottom-line projection indicates a year-over-year increase of 3.9%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 7.6%.

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For the current year, the Zacks Consensus Estimate for AmEx’s revenues is pegged at $71.5 billion, implying a rise of 8.4% year over year. Also, the consensus mark for current year EPS is pegged at $15.24, implying a jump of around 14.2% on a year-over-year basis.

AmExbeat the consensus estimate for earnings in each of the last four quarters, with the average surprise being 6.9%.

Q1 Earnings Whispers for AXP

However, our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.

AXP has an Earnings ESP of -0.40% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping AXP’s Q1 Results?

American Express is expected to have witnessed a rise in network volumes during the first quarter, continuing the trend seen in the past quarters. This uptick is likely attributable to the resilient consumer spending of AXP’s premium customer base, which is less impacted by economic downturns. The Zacks Consensus Estimate for first-quarter total network volumes indicates 6.1% year-over-year growth from $419.2 billion.

Discount revenues, a key source of revenues for AmEx, are likely to have benefited from rising network volumes. The Zacks Consensus Estimate for first-quarter Discount revenues indicates 5% year-over-year growth. Billed businesses in U.S. Consumer Services and Commercial Services are expected to have witnessed growth of 8% and 2.7% year over year, respectively.

Cards-in-force is likely to have witnessed an uptick in the quarter under review due to expanding product offerings and enhancing mobile platforms, which improve the customer experience. The Zacks Consensus Estimate for first-quarter total cards-in-force indicates 4.5% year-over-year growth. The consensus estimate for Average Card Member loans also implies a 10.6% year-over-year increase.

AmEx’s interest income, another major revenue contributor, is likely to have risen on higher loan receivables. The Zacks Consensus Estimate for AXP’s total interest income suggests an upside of 5.2% from the year-ago reported figure of $5.8 billion.

The factors mentioned above are expected to have positioned American Express for year-over-year growth. However, an increase in expenses, card member services, marketing and salaries is likely to have trimmed margin growth, partially offsetting the positive impacts. First-quarter client engagement costs are likely to have increased due to expanding Card Member spending and higher usage of travel-related benefits.

Also, the Zacks Consensus Estimate for pre-tax income from Global Merchant and Network Services indicates a 3% decline from a year ago. Similarly, the consensus mark for pre-tax income from U.S. Consumer Services suggests a 5.4% fall from the year-ago level, making an earnings beat uncertain.

AXP’s Price Performance & Valuation

AmEx’s stock has declined 13.9% in the year-to-date period, outperforming the industry’s fall of 18.5%. During this time, peers like Visa Inc. (V Quick QuoteV - Free Report) has gained 6.1% while Mastercard Incorporated (MA Quick QuoteMA - Free Report) has lost 2.7%. AXP stock has lagged the S&P 500 Index as well, which dropped 9.1% during the same period.

Price Performance – AXP, V, MA, Industry & S&P 500

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Now, let’s look at the value American Express offers investors at current levels.

Currently, AXP is trading at 16.08X forward 12-months earnings, above the industry’s average of 13.97X, marking it overvalued. However, it is much cheaper compared to its peers like Visa and Mastercard, which are valued at 27.76X and 30.75X F12M P/E, respectively.

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How to Play American Express Stock Now?

Though often grouped with Visa and Mastercard, AmEx runs a different model. It issues cards and processes payments, taking on full credit risk. However, its affluent, low-risk customer base helps offset this added exposure.

In today’s uncertain market, rate cut expectations are rising, but Fed Chair Powell remains cautious. Lower rates could hurt AmEx’s banking margins but may boost consumer spending and swipe fee revenue. Higher rates help its banking arm but pressure credit card activity.

While American Express has a long-term appeal, near-term challenges shouldn’t be overlooked. Rising expenses are straining profit growth, driven by higher spending on rewards and customer engagement. As travel and card usage climb, so will variable costs. AmEx also faces greater exposure to U.S. economic shifts than global players like Visa and Mastercard, which benefit from broader international diversification and digital infrastructure. Its growth remains tightly linked to lending and card volumes, limiting flexibility in a fast-evolving payment landscape.

For current shareholders, steady operations and customer resilience are reassuring. Growth in first quarter performance will further boost investor sentiment. But for new investors, waiting for a better entry point may be wise, especially with regulatory changes and spending shifts looming.