Our Plan for This Finance Holding After Fee Surge

American Express (AXP) delivered a consensus-topping earnings report for Q1 2026 and stuck to its prior guidance for the coming year. By the numbers:

Amex reported Q1 2026 EPS of $4.28 per share, $0.28 better than the $4.00 consensus. Revenue for the quarter climbed 11.4% year over year to $18.91 billion versus the $18.6 billion market forecast.

Despite the Q1 2026 EPS beat, Amex reaffirmed its 2026 revenue growth forecast of 9% to 10% and did the same for its 2026 EPS guidance of $17.30 to $17.90 versus $15.38 in 2025.

Given the run up in the shares to $330 ahead of Thursday morning’s earnings report off the recent mark below $295, we shouldn’t be surprised that the shares are trading off with management only reiterating its bottom-line guidance of $17.30 to $17.90 for this year given the size of the Q1 2026 EPS beat it delivered.

To be fair, Amex continued to repurchase shares during the quarter, and the 2% shrinkage in the outstanding share count had a modest positive impact on reported EPS. We estimate the lower share count represented around $0.09 of the $0.28 EPS beat. Per the filed 10Q, Amex bought back about 5.3 million shares at average share price of $311.04 in Q1 2026.

Reading Between the Lines

Yes, Amex cardholders continued to spend during the quarter, with network volumes up 11%, far better than the 3.7% year-over-year gain in Q1 2026 retail and food service sales found in the March Retail Sales Report. Not surprising given the nature of Amex’s members, but what we saw underneath the hood for the number of cards enforce and average fee per card keeps us bullish on the company’s membership-driven business model and the shares. Remember, those are the inputs for the high-margin net card fee revenue line that drives more than 70% of Amex’s pre-tax income.

Amex ended Q1 2026 with 153.9 million cards in force, and it picked up 3.1 million new proprietary cards during the quarter, a quicker clip than the 2.9 million added in Q4 2025. In thinking about this acceleration, Amex started its Platinum Card refresh on September 18, 2025, so it’s not surprising to see some lag in new card memberships even though the expanded array of benefits, in our view, speaks for itself and significantly offsets the annual Platinum Card cost.

The evidence of the Platinum Card refresh effort can be clearly seen in the average fee per card, which reached $127 in Q1 2026, up more than 14% versus the year-ago quarter. We should continue to see that average fee per card trend higher as new Platinum Card members are added and as existing cardholders’ anniversary their annual membership fee. During Thursday morning’s earnings call, Amex management indicated that roughly one fourth of the overall U.S. consumer Platinum Card portfolio has been billed at the new annual fee.

We see that supporting the average fee per card trending higher in the coming quarters compared to the estimated average fee per card near $117 for 2025. That higher fee spread across more cardholders explains why, in our view, Amex is able to comfortably reiterate its guidance for 2026, especially if it continues to repurchase shares.

Our Plan for AXP Shares

We would argue that reiteration is conservative and that means we will be looking to round out the Portfolio’s exposure to AXP shares in the coming days. The next layer of support is the 50-day moving average, currently just under $315, and given our growing concern for the larger Q1 2026 earnings season, we’ll continue to track that level but be mindful of the early April gap in AXP shares near $305. For now, we’ll reiterate our $400 price target, but should we see AXP shares pull back to levels we just touched on, it would give us reason to revisit our Two rating.

During Thursday morning’s earnings call, Amex management teased some potential catalysts on the horizon. These included 300 additional properties being added to its fine hotel and resort collection and new Centurion lounges being opened, as well as “upcoming announcements with leading AI companies to make our membership assets discoverable and actionable on their platforms.”

For us, the key to AXP shares it the continued growth in cards in force and the upward trajectory in average feed per card. Those forthcoming announcements are ones that, in our view, should help spur both.

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At the time of publication, TheStreet Pro Portfolio was long AXP.