We’re Keeping Our Amex Price Target and Rating
Card fee prospects support our view Amex’s guidance skews conservative. Here’s what else you might have missed.
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Similar to our comments after Alphabet’s (GOOGL) Q2 2026 earnings, we are reiterating our $400 price target for American Express (AXP) following its latest quarterly results Friday. As we shared in our opening comments, AXP shares are trading off in response to the company just reiterating its 2026 guidance calling for EPS between $17.30-$17.90, which was first shared back in January; the average analyst estimate is $17.69. That is the pattern we tend to see with American Express and its shares, especially over the last five quarters.
The company’s 2026 EPS reiteration comes after topping Q2 2026 EPS by $0.13 and besting Q1 2026 EPS by $0.29. It also follows the company lifting its 2026 top-line forecast to 10% vs. the prior 9%-10% range. But what we think people are missing is the following:
Card fees reached record levels of $2.86 million in the quarter, up 15.4% year over year, and were the fastest-growing revenue line in the quarter. That reflects Amex reaping the benefits of its card refresh efforts, which led the number of cards in force to reach 155.1 million with an average fee per card of $131. Simple math tells us that is well above the H2 2025 average of 152 million cards in force and net fee per card of $120.50.
With card fees driving 70% of Amex’s pretax income, that step up alone suggests management’s guidance is conservative. But during today’s earnings call, Amex management said card-fee growth is expected to accelerate in the current quarter and exit the year in the high teens. That telegraphs a rise in Amex’s pretax income and EPS in the coming quarters.
Keeping that in mind, when we annualize the $8.81 in EPS Amex generated in H1 2026, it implies $17.62 in EPS for 2026. This adds to our thinking that Amex’s guidance is once again skewing conservative.
Understanding that supports our bullish stance on AXP shares, and our One rating. However, we will reiterate the comments we made in discussing our plan for GOOGL shares:
… next week we have quarterly results from the other hyperscalers, and given the capex increases at Alphabet and Tesla (TSLA), odds are high we’ll see them follow a similar path. The concern we have is that will keep pressure on GOOGL shares as well as those for the other hyperscalers. Other near-term concerns include incrementally more hawkish Fed comments next week and renewed geopolitical tensions in response to President Trump’s new tariffs…
As we share those thoughts, we recognize it is very difficult to catch a stock as it bottoms out, but our thinking is we would rather wait until more known unknowns are revealed and that added weight, good or bad, is reflected in the shares.
Following today’s decline in AXP shares, the Portfolio’s position size is ~3.7%, which does not give us much room to add to our holdings. But for those whose position sizes are smaller, the next few days could bring a nice opportunity to build out your AXP position. To the extent coming market developments drag the shares into an oversold condition, our view is that would make for an even more compelling risk-to-reward tradeoff.
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At the time of publication, TheStreet Pro Portfolio is long AXP and GOOGL.
