American Express Company (AXP Quick QuoteAXP - Free Report) currently trades at a forward price-to-earnings multiple of 16.64X, well above the industry average of 9.55X. However, the stock remains below its five-year median multiple of 17.23X, suggesting that the current premium is not unusually stretched relative to its own historical levels.

Meanwhile, key peers such as Visa Inc. (V Quick QuoteV - Free Report) and Mastercard Incorporated (MA Quick QuoteMA - Free Report) command much higher valuations, trading at 22.55X and 24.89X forward earnings, respectively. The gap reflects structural differences in business models. Visa and Mastercard operate largely as payment networks with limited credit exposure, whereas AXP combines issuing, lending and network operations under one platform.

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Market Sentiment Pressuring the Payments Space

AmEx shares have declined 18.9% year to date, mirroring weakness across the broader industry. Visa and Mastercard have also lost ground during this period as investors reassess growth expectations. The S&P 500 has slipped about 3.2% this year, weighed down by concerns about slowing consumer activity and macroeconomic uncertainty.

Investors are increasingly wary of how emerging technologies like artificial intelligence could reshape the job market and alter long-term spending patterns. At the same time, geopolitical tensions are expected to keep inflation elevated, potentially pressuring discretionary spending and transaction volumes across the payments ecosystem.

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

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What AXP is Doing Right?

Despite these concerns, the market’s pessimism toward AmEx may be somewhat exaggerated. Unlike many payment companies that rely heavily on mass-market spending, it benefits from a high-income customer base that tends to remain resilient even during economic slowdowns.

Recent trends show rising revolving loan balances, steady growth in card fees and continued expansion in card member spending, supporting the company’s revenue outlook. This spending resilience helps cushion the business from cyclical fluctuations in consumer activity.

The company also stands out due to its vertically integrated payments model. Unlike Visa and Mastercard, which primarily operate network platforms, AmEx functions as both a card issuer and a payment network. By controlling the full transaction ecosystem, the company captures a larger share of transaction economics. This structure supports stronger revenue generation, higher margins and deeper relationships with cardholders. The integrated system also provides rich data insights that help AXP personalize rewards, improve customer engagement and strengthen its premium brand positioning.

Looking ahead, AmEx is focusing on expanding its long-term customer base by targeting affluent Gen Z and Millennial consumers. These younger demographics tend to spend heavily on travel, dining and lifestyle experiences, categories where its rewards ecosystem is particularly strong. As their incomes rise over time, these customers are expected to become high-value, long-duration revenue contributors. By bringing them into the platform early in their financial journey, the company aims to build relationships that will support sustained growth in the years ahead.

Earnings Estimates & Surprise History

The Zacks Consensus Estimate for 2026 EPS is $17.50, indicating 13.8% growth, with 2027 expected to grow another 14.5%. Over the long term, it expects earnings growth to be in the mid-teens.The company exceeded EPS estimates in three of the last four quarters and missed once, with an average surprise of 3.9%.

American Express Company Price, Consensus and EPS Surprise

American Express Company price-consensus-eps-surprise-chart | American Express Company Quote

Revenue projections show year-over-year growth of 9% in 2026 to $78.7 billion, and another 8.2% rise in 2027.

Risks to Consider

While American Express maintains a strong competitive position, several risks remain.

One key challenge is the company’s relatively greater reliance on the U.S. market compared with peers like Visa and Mastercard, both of which have built extensive global digital payments networks. AmEx continues to depend heavily on card lending and spending volumes for growth. This model could limit its ability to quickly adapt to emerging non-card payment trends that are reshaping the broader payments landscape.

Unlike its network-only peers, AmEx functions as both a card issuer and payment network, exposing it to direct credit risk from cardholders.This structure requires careful management of both operational performance and loan portfolio quality, particularly during periods of economic uncertainty.

Cost pressures are also increasing. Total expenses rose to 73.6% of revenues in 2025 from 72.6% in 2024, reflecting higher spending on rewards and customer engagement. Rewards and cardmember services alone accounted for nearly 46% of total expenses.

Leverage is another consideration. As of Dec. 31, 2025, the company carried $57.8 billion in debt, with a long-term debt-to-capital ratio of 62.8%, above the industry average of 42.7%. Interest expenses tied to long-term debt and other borrowingsrose 10% in 2025.

Bottom Line

In conclusion, American Express continues to demonstrate resilient fundamentals despite recent market volatility. While the stock trades above the industry’s average valuation, it remains below its historical median and still at a discount to peers like Visa and Mastercard. Its affluent customer base, vertically integrated payments model and steady spending trends provide solid long-term growth drivers. However, rising expenses, credit exposure and higher leverage warrant careful monitoring in a potentially uncertain macro environment.

With steady earnings growth expected but some structural risks present, AmEx currently carries a Zacks Rank #3 (Hold), suggesting investors may want to wait for clearer catalysts before taking fresh positions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.