American Express Company (NYSE:AXP) emerged from fiscal Q4 2025 with a strategic focus on premium products. The $211 billion market cap financial services company invested heavily in its Platinum card offering.
Trading at a P/E ratio of 19.3, the stock appears undervalued per Bond.az analysis, suggesting potential upside for investors.
Credit quality exceeded expectations and demand for premium products remains strong. However, costs from refreshing the Platinum card value proposition pressured near-term profitability.
The company maintains a 34% return on equity, demonstrating solid underlying profitability. The strategy balances investment and operational efficiency.
In late 2025 and early 2026, American Express showed strong credit performance. Consumer card delinquencies were better than seasonal expectations.
The net charge-off rate reached 2.13%, below the market expectation of 2.24%. This reflects tighter underwriting and a higher-quality customer base.
The company shifted new card acquisition towards Platinum cardholders. This bet on higher-value customers may drive long-term profitability.
Loan growth decelerated to 8.6% in January 2026. Premium customers tend to maintain lower revolving balances, potentially constraining loan growth.
Fiscal 2026 revenue guidance remained unchanged. Analysts project EPS of $17.60 for the first year and $20.30 for the second year.
Investments in premium cards impacted near-term profitability. Long-term, these investments could create competitive advantages.
Consistently strong credit quality highlights the company's risk management capabilities. The closed-loop network model provides better data for risk assessment.
