Hey there, bargain hunter.
American Express is down about 16% this year. The stock trades below where it ended 2025. And the market’s reason for selling it — macro uncertainty, tariff pressure, consumer spending fears — is running directly into a data point nobody seems to want to talk about.
The CFO already told investors that Q2 billing growth is running slightly stronger than Q1. And Q1 was, in his own words, the strongest quarter American Express had seen in three years.
So either the market is right and something breaks in July 24’s report. Or the stock is just mispriced.
The Q1 Numbers
First quarter 2026 EPS came in at $4.28, an 18% jump from the year-ago period. Revenue rose 11% to $18.91 billion. Billed business — total card spending — climbed to $428 billion, up 9% on a foreign exchange-adjusted basis. That was the strongest quarterly growth rate in three years.
Net write-off rate came in at 2.0%, actually an improvement from 2.1% a year earlier. Return on equity was 35% for the quarter.
Management reaffirmed full-year guidance of 9% to 10% revenue growth and EPS of $17.30 to $17.90. Then instead of raising guidance, they said they’d reinvest the Q1 over-delivery into incremental marketing and technology spending. Which sounds like a cost, but is actually how AmEx builds the next growth layer — the Platinum refresh and new commercial card products are funded that way.
The Platinum Card Detail Nobody Is Pricing
Here’s what’s interesting. The Platinum card refresh is compounding in ways the headline revenue number doesn’t fully capture. U.S. Consumer Platinum spend jumped six percentage points above prior trend after the refresh. Lodging spend on Fine Hotels and Resorts and The Hotel Collection was up 50% year over year.
That’s not a loyalty program working at the margins. That’s a flywheel. AmEx raises the annual fee, cardholders spend more to justify it, retention holds, and the lifetime value of each account goes up. The bear case on AmEx has always been that the premium model breaks when affluent consumers get cautious. The Q1 data says affluent consumers spent more on luxury retail (up 18%), more on travel, and kept paying their bills at a rate that actually improved year over year.
In 2026, the company is also releasing eight new commercial products across the commercial segment. If that lands, AmEx gets a revenue driver that isn’t in current Street estimates.
What July 24 Actually Tests
Wall Street expects about $4.40 in EPS for Q2. That’s the bar. Given that the CFO said Q2 was tracking above Q1’s pace as of early June, a clean beat is more likely than not. The question is what happens to the stock after.
When Q1 results landed in April, AXP dropped 4.3% despite beating on every major line. The market was already pricing in macro risk that the numbers didn’t confirm. That kind of response is usually a sign that the stock is waiting for a different kind of permission — not a beat, but a clean credit read-through and a management tone that doesn’t hedge on the second half.
The credit picture is the swing factor. Write-off rates improved in Q1. Delinquency trends were stable. If Q2 holds that pattern, the macro fear story collapses under the weight of the data. If it doesn’t — if commercial or consumer credit starts cracking — the valuation, while already compressed, doesn’t provide much cushion.
The Valuation Gap
AXP currently trades at roughly 17x next-twelve-months earnings. That’s a premium to consumer finance peers, but it reflects something real: a closed-loop network, a card fee revenue stream that doesn’t require lending, and a credit book that has historically absorbed economic stress better than most large financial institutions.
The stock’s 52-week high was $387.49. At current levels, a full recovery to that high represents roughly 10% upside just to get back to where the year started. Full-year EPS consensus sits at $17.65, implying about 14.8% earnings growth year over year. If the multiple holds and earnings hit the midpoint of guidance, the math works.
Cheap Investor Scorecard
- YTD performance: down roughly 16%, lagging the S&P 500
- Q1 EPS: $4.28 (up 18% YoY)
- Q1 revenue: $18.91B, up 11% YoY
- Q1 billed business: $428B, up 10% YoY (9% FX-adjusted; fastest pace in 3 years)
- Net write-off rate: 2.0% (improved from 2.1% a year ago)
- Q1 ROE: 35%
- Full-year 2026 guidance: EPS $17.30 to $17.90, revenue growth 9% to 10%
- Q2 EPS consensus: about $4.40
- Q2 earnings date: July 24, before market open
The CFO’s June conference comment was the most underreported data point of the month. Q2 billing growth running above Q1. Q1 was a three-year high. The math is either going to validate the selloff or expose it. Either way, July 24 is worth watching closely.
