Here's What's in the Cards for American Express and Our Price Target
The shares are down following earnings, but is that warranted? Let's break down the quarter and our game plan.
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Shares of American Express (AXP) are trading off Friday following what some are calling a “mixed” December quarter, which is overshadowing more-robust-than-expected 2026 guidance and its latest dividend increase.
Amex delivered quarterly EPS of $3.53, a penny shy of the market consensus, on revenue that climbed 10.5%, year over year, to $18.98 billion, ahead of the $18.93 billion consensus. In the current environment, we are not surprised by the knee-jerk reaction to that ever-so-slight bottom-line miss, but what we see in the all-important net card fee revenue stream (72% of annual pre-tax income) keeps us bullish on AXP.
Card Numbers
Exiting the December quarter, Amex had 152.8 million cards in force, up from 146.5 million at the end of 2024. We attribute that to the Platinum card refresh effort, which also lifted Amex’s average feed per card to $122 at the end of 2025 compared to $108 exiting 2024.
As we look back on 2025, the average number of cards in force was ~150.2 million, with an average net fee card near $117. And the trend of Amex members spending more on their cards continues, with average proprietary basic card member spending hitting $6,696 in the quarter, up almost 5% compared to Q4 2024.
Guidance
Annualizing the December-quarter metrics alone goes a long way to support Amex’s 9%-10% expected revenue increase for 2026 as well as the larger increase it sees for its bottom line. By the numbers, Amex guided 2026 revenue to be up 9%-10% and EPS to be in the range of $17.30-$17.90.
The market was looking for 2026 revenue to be up 9% and EPS around $17.38, which is a wee bit below the midpoint of Amex’s EPS guidance. Helping support that quicker bottom-line growth, Amex sees card fee growth accelerating in the quarters ahead while it keeps a tight lid on expenses, targeting operating expenses up mid-single digits in 2026 with a more modest low-single-digit increase for marketing.
Two Things to Watch
Guidance gives us extra cushion for our $400 price target, but we recognize two things. First, while we’ve moved past President Trump’s January 20 deadline for a 10% credit card cap, it is likely to be an overhang until the president abandons the increasingly criticized plan that would hobble consumer spending. Second, given the increasingly “show me” sentiment driving the market, it will need to see the Platinum card fresh and similar programs at Amex continue to drive cards in force and average fee per card higher.
Those factors could restrain Amex shares in the near term, but with 231 days until we reach the current Platinum card refresh anniversaries, we see more gains ahead for Amex and the shares. As we wait for supporting data points, we’ll be happy to collect the company’s forthcoming quarterly dividend increase of 16% per share to $0.95.
Our Amex Game Plan
With a 4.1% AXP position size in the Portfolio, we are not inclined to add more shares, however, we will continue to assess entry points for members whose position sizes are below the Portfolio’s.
With that in mind, Friday’s move lower puts the stock’s 100-day moving average in play. You’ll want to see a successful test of that level, which means we will want to see it close above the $354.76 level on Monday before making any near-term moves. Is that likely to happen? We would argue yes as we are likely to see Wall Street’s consensus price target of $377 move higher in the coming days.
At the time of publication, TheStreet Pro Portfolio was long AXP.
