Amex Makes Another Move to Expand Member Benefits
Here’s the real reason, though, why the shares are rising.
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Over the last few days, the Portfolio’s shares of American Express (AXP) have climbed ~13% since their early June bottom, including, in part, today’s more than 4% bounce. That latest climb makes sense as the market starts to look past the upcoming U.S.-Iran deal signing on Friday with even lower oil prices ahead and supply chain issues uncurling. The thinking is consumer spending pressures will abate, and we see the logic to that argument even though we do expect inflation pressures to linger.
The market is also probably reacting to news today that American Express is aiming to acquire TheFork from Tripadvisor (TRIP). TheFork connects millions of diners with more than 50,000 restaurants across 11 European countries through its restaurant management, booking and customer engagement platform, alongside a consumer-facing restaurant discovery and reservation app and website. We see this building on properties Amex already owns, namely Resy and reservation management technology provider Tock, which it picked up from Squarespace (SQSP) in late 2024.
We view this as part of Amex’s strategy to expand membership benefits, a driver that grows the company’s membership base and the number of cards in force, but helps facilitate upgrades to premium cards, like the Platinum Card.
We’ve talked quite a bit about Amex’s Platinum Card refresh and how that effort is poised to deliver a very nice one-two profit punch in the form of growing the number of cards in force and average fee per card in the coming quarters. Given all the recent attention on the Iran war and the SpaceX (SPCX) IPO, it’s fair to say that many may have missed Amex’s management presentation at the Morgan Stanley US Financials Conference.
During the presentation, CFO Christophe Le Caillec noted that demand for new cards remains “very strong” with spending better than Q1 2026. Le Caillec also expects card fees to increase in the balance of the year, hitting a high-teens growth rate. More cards at a higher average card fee means a nice step up in net card fees, which drives more than 70% of Amex’s pretax income.
In our view, it’s those comments that are the real driver behind the recent move in AXP shares, as well as keep us bullish on them and support our $400 price target.
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At the time of publication, TheStreet Pro Portfolio was long AXP shares.
