VALUATION HIGHLIGHTS

1. Global Consumer Services constitute 59% of the Trefis price estimate for American Express Company's stock.
2. Merchant & Network Service constitutes 24% of the Trefis price estimate for American Express Company's stock.
3. Global Commercial Services constitute 17% of the Trefis price estimate for American Express Company's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 and Full Year 2025

American Express reported fourth-quarter 2025 revenue of $19.0 billion, a 10% year-over-year increase, driven by robust card member spending and double-digit growth in net card fees. Earnings per share (EPS) for the quarter rose 16% to $3.53, narrowly missing the consensus estimate of $3.54 due to a 10% surge in operating expenses linked to strategic marketing for the U.S. Platinum Card refresh. For the full year, the company achieved record revenues of $72.2 billion and an adjusted EPS of $15.38. Management issued a bullish 2026 outlook, forecasting revenue growth of 9% to 10% and EPS between $17.30 and $17.90.

Note: American Express's FY'25 ended on December 31, 2025.

Launch of Sidecar by The Centurion Lounge

In March 2026, American Express expanded its luxury travel footprint with the opening of "Sidecar by The Centurion Lounge" at Las Vegas' Harry Reid International Airport. This new small-format, speakeasy-inspired lounge concept is designed to optimize smaller airport footprints while delivering premium food and beverage experiences. The launch reinforces the company's strategy to deepen engagement with its high-spending Platinum and Centurion members, following a 30% increase in travel bookings and a 12% rise in Platinum card spending recorded throughout 2025.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of American Express's value that present opportunities for upside or downside to the current Trefis price estimate:

U.S. Consumer Services

• Premium Card Fee Growth: Net card fee revenue grew 18% in 2025, approaching $10 billion. Trefis estimates for fee growth may see upside if the recent Platinum and Gold card refreshes continue to drive double-digit account growth. However, increased marketing and customer engagement costs, which reached $14.5 billion in Q4, could pressure margins if acquisition costs exceed the lifetime value of new members.


• Millennial and Gen Z Engagement: Younger demographics accounted for 65% of new card acquisitions in late 2025 and now represent 35% of U.S. consumer spending. As these cohorts enter their peak earning years, their rising spending power provides a long-term tailwind for transaction volumes. A faster-than-expected shift in their spending toward experiential luxury could push billed business above current forecasts.

For additional details, select a division from the interactive Trefis split for American Express at the top of the page.

BUSINESS SUMMARY

American Express operates a unique integrated "closed-loop" payments model, acting as both the card issuer and the network merchant acquirer. This model allows the company to capture the full value chain of a transaction, generating revenue from merchant discount fees, annual card memberships, and interest on revolving loans. The business is heavily skewed toward affluent consumers and corporate clients, providing a resilient revenue stream that is less sensitive to broad economic volatility compared to traditional mass-market lenders.

SOURCES OF VALUE

The company's competitive advantage is rooted in its high-spending membership base and its premium lifestyle ecosystem.

Closed-Loop Network and Merchant Relationships

By maintaining direct relationships with both cardholders and merchants, American Express captures vast amounts of data that competitors like Visa and Mastercard do not. This data enables highly targeted marketing and superior fraud prevention, with AI models preventing approximately $2 billion in annual fraud. The network's reach expanded to 160 million merchant locations by 2026, nearly quintupling its 2017 footprint and closing the acceptance gap with major rivals.

Premium Brand and Lifestyle Ecosystem

The "Amex Moat" is fortified by a 98% retention rate among Platinum cardholders, driven by exclusive access to over 1,550 airport lounges and the Resy dining platform. The company's focus on "experiential differentiation" makes its membership model highly defensive; even during inflationary periods, its affluent base continues to spend on luxury travel and fine dining, which saw 9% and 12% growth respectively in 2025.

KEY TRENDS

Normalization of Credit Metrics

While credit performance remains best-in-class, delinquency rates and net write-offs are gradually normalizing from historic lows. The Q4 2025 write-off rate rose to 2.1% from 1.9% a year prior. While management maintains that the affluent customer base is resilient, a broader economic downturn or higher-for-longer interest rates could lead to higher provision builds, impacting bottom-line profitability in 2026.

Aggressive Capital Return Strategy

In early 2026, the Board authorized a 16% increase in the quarterly common stock dividend to $0.95 per share. This move, combined with planned share repurchases, signals management's confidence in its mid-teens EPS growth target. This focus on capital returns is a key strategy to maintain investor interest as the company navigates potential regulatory shifts, such as proposed caps on credit card interest rates.