American Express Stock (AXP) Has Slow Start To 2026 – Can Earnings Reignite Momentum?

American Express’ stock (NYSE:AXP) has had a slow start to the year, down 3.82% YTD, and a further 0.88% in the pre-market ahead of this morning’s earnings. With the AXP stock price having put up a strong rally through the last three quarters of 2025, a pause before the next print is not entirely unexpected.

The quarter provides the first test of whether holiday spending by affluent cardholders sustained momentum from the third quarter’s 9% billed-business acceleration, or whether normalization pressures began to surface.

Expectations for the quarter are for $4.00 EPS and $18.05B revenue, representing 14.5% and 8.5% year-over-year growth respectively.

The setup reflects American Express’s October guidance raise, when management lifted the FY2025 EPS floor to $15.20 from $15.00 and revenue growth to 9% from 8%, effectively narrowing the downside case. That move followed a string of four consecutive quarterly beats, including Q3’s $4.14 print on $18.43B revenue.

The market’s reaction to those beats, however, has been inconsistent: Q3 delivered a 6% rally, while Q2’s 5% EPS beat produced a flat response. The pattern suggests investors discount execution upside unless management simultaneously tightens forward visibility or demonstrates that engagement costs and credit provisions are not eroding operating leverage.

The fourth quarter will determine whether American Express can sustain its valuation premium of 24.0x trailing earnings, a multiple that sits above the sector median and implies continued confidence in premium-customer resilience.

The company’s 77.8% beat rate over the past five years provides credibility, but the recent 0.4% downward revision in consensus EPS over 30 days and a negative Earnings ESP of -0.47% indicate that the Street has tempered expectations heading into the print. The result will either validate the premium positioning or force a reassessment of whether engagement investments and competitive intensity are compressing margins faster than revenue growth can offset.

Consensus Estimates

Consensus EPS of $4.00 implies American Express needs to deliver approximately $3.55 in Q4 to reach the midpoint of its raised full-year guidance range of $15.20 to $15.50. The $0.45 gap between the Q4 consensus and the implied guidance figure creates a mechanical risk: if the company reports in line with consensus but guides conservatively for 2026, the market may interpret the result as a miss relative to the trajectory established by the October floor raise. Revenue consensus of $18.05B sits 8.5% above the prior-year quarter, a deceleration from Q3’s 11% growth, reflecting expectations that holiday spending momentum moderated from the third quarter’s acceleration.

The estimate range for EPS spans $3.74 to $4.25, a 51-cent spread that indicates meaningful dispersion in analyst views on credit provisions and engagement costs. The nine upward revisions over 30 days with zero downward moves suggest that analysts who cover the stock closely have maintained confidence, but the 0.4% decline in consensus over the same period indicates that the aggregate view has softened slightly, likely reflecting caution on 2026 visibility rather than Q4 execution risk.

Management Guidance and Commentary

“We are pleased to raise our full-year 2025 outlook for both revenues and earnings, reflecting the strong performance we delivered in the third quarter and our confidence in the business heading into the fourth quarter.”

Management’s October 2025 guidance raise moved the EPS floor to $15.20 from $15.00 and lifted revenue growth to 9% to 10% from 8% to 10%, effectively compressing the downside scenario. The move followed Q3’s $4.14 EPS print and $18.43B revenue, both of which exceeded expectations. The guidance adjustment was framed as confidence in sustained premium-customer spending and successful product refresh initiatives, particularly around the Platinum card, which management positioned as a growth driver rather than a defensive retention tool.

The gap between consensus and guidance creates a specific risk profile. If American Express delivers $4.00 EPS in Q4, full-year 2025 EPS would reach $15.90, approximately 26 cents above the high end of the $15.20 to $15.50 range. That outcome would ordinarily support a beat narrative, but the market’s focus has shifted to 2026 visibility. Management’s commentary on whether engagement costs, competitive intensity, and credit normalization will compress margins in 2026 will matter more than the Q4 result itself. The company’s historical pattern shows that guidance posture drives estimate resets faster than reported beats: the October floor raise was the most decisive catalyst for narrowing downside scenarios over the past year, not any single quarterly upside surprise.

Analyst Price Targets & Ratings

Wall Street maintains a positive view with 78% of analysts rating shares Buy or Strong Buy. The consensus target of $377.22 implies modest 4.9% upside from current levels, reflecting confidence in execution but limited enthusiasm for multiple expansion. The absence of Sell ratings indicates broad agreement on American Express’s competitive positioning, though the concentration of Hold ratings at 22% suggests some analysts view the current valuation as fair value pending 2026 visibility.

Sector & Peer Comparison

American Express trades at a 24.0x trailing P/E, positioning it between the payment networks (Visa at 31.2x, Mastercard at 35.8x) and the consumer finance lenders (Discover at 12.3x, Capital One at 11.6x, Synchrony at 9.8x). The valuation reflects the company’s hybrid model: it operates a closed-loop network like Visa and Mastercard but also carries credit risk like the lenders. The forward P/E of 20.7x implies the market expects earnings growth to justify the premium, but the multiple compresses if 2026 guidance signals margin pressure from engagement costs or credit normalization.

The profit margin of 16.1% sits well below Visa’s 51.6% and Mastercard’s 46.2%, reflecting American Express’s lending exposure and higher cost-to-serve from premium benefits and rewards. The margin also trails Discover’s 24.7%, indicating that American Express’s premium positioning has not yet translated into superior profitability relative to peers with broader market exposure. The valuation premium therefore rests on the assumption that revenue growth from high-spending customers will eventually drive operating leverage, but recent earnings from Synchrony and Capital One, both of which missed expectations and saw stock declines, suggest the market is skeptical of consumer finance narratives heading into 2026.

Earnings Track Record

American Express has beaten consensus EPS estimates in 14 of the past 18 quarters, a 77.8% success rate that establishes credibility on execution. The average surprise of 9.7% indicates consistent ability to exceed expectations, but the magnitude of beats has compressed in recent quarters: Q3 2025 delivered a 4.0% beat, Q2 a 5.2% beat, and Q1 a 4.9% beat, all below the 11.7% and 11.9% beats recorded in Q1 2024 and Q3 2023. The pattern suggests either that the Street has tightened estimates to reflect improved visibility, or that the company’s ability to generate upside has narrowed as growth normalizes.

The two misses in the past 18 quarters both occurred in Q4, with Q4 2024 missing by 0.3% and Q4 2023 missing by 1.1%. Both misses were marginal and followed by guidance that maintained or raised full-year expectations, indicating that the company prioritized annual targets over quarterly optics. The Q4 2024 miss, however, produced a 2.7% stock decline despite revenue beating expectations, reinforcing that the market penalizes even small misses when guidance does not offset the disappointment.

Post-Earnings Price Movement History

American Express’s post-earnings price reactions show no consistent correlation between EPS beats and next-day stock performance. The average move on beats is -0.3%, while the average move on misses is +0.4%, indicating that the market reacts more to guidance and forward commentary than to reported results. The most dramatic recent example occurred in Q3 2025, when a 4.0% EPS beat produced a 4.0% stock decline, likely driven by concerns that the guidance raise was insufficient relative to the beat magnitude or that management’s commentary on engagement costs tempered enthusiasm.

Expected Move & Implied Volatility

The options market prices a 3.2% move in either direction following the January 30 earnings report, translating to a range of $348.21 to $371.25. This expected move sits above the -0.2% average historical move but below the 4.0% decline that followed Q3 2025’s report, suggesting the market anticipates a meaningful reaction but not an extreme outlier. The implied volatility of 28.4% exceeds the 30-day historical volatility of 24.1%, indicating that options traders are paying a premium for protection or speculation relative to recent realized volatility.

Expert Predictions & What to Watch

Key Outlook: Cautiously Bullish

The fourth quarter captured the holiday spending season, traditionally a strength for American Express given its affluent customer base’s propensity for travel and entertainment. The company’s Q3 commentary emphasized sustained momentum in billed business, which grew 9% year-over-year, and management’s October guidance raise signaled confidence heading into Q4. If holiday spending matched or exceeded Q3’s trajectory, the company should clear the $4.00 consensus EPS estimate by a modest margin, consistent with the 4% to 5% beats delivered in the prior three quarters.

Key Metrics to Watch

The 2026 EPS guidance will determine the stock’s trajectory more than any Q4 result. American Express has consistently beaten quarterly estimates but seen mixed stock reactions because the market discounts execution upside unless management tightens forward visibility. The October 2025 guidance raise was the most decisive catalyst for narrowing downside scenarios over the past year, demonstrating that guidance posture drives estimate resets faster than reported beats. If management provides 2026 EPS guidance in the range of $17.50 to $18.00, implying 13% to 16% growth, the stock will likely rally toward $390 regardless of whether Q4 EPS comes in at $4.00 or $4.10.

The billed business growth metric serves as the leading indicator of revenue trajectory. American Express’s Q3 commentary emphasized that spending accelerated to 9% growth with strong retail spending and a rebound in travel, indicating continued normalization in discretionary spending patterns.

If Q4 billed business growth matches or exceeds 9%, the company will have demonstrated that holiday spending sustained momentum, validating the premium-customer resilience thesis. A deceleration below 8% would raise concerns that normalization pressures are emerging, forcing analysts to lower 2026 revenue estimates and compressing the valuation multiple.