AXP
AMERICAN EXPRESS CONYSEValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Sep 4, 2026 · Valuation Sep 5, 2026
What drives AXP's base case?
base-case thesisRecent customer spending, interest income, and card fees are all expanding, and management increased its near-term revenue outlook. The central case assumes those engines remain healthy but slow as the company becomes larger. Profit efficiency stays close to the latest quarter, while part of earnings continues to fund card balances, technology, and customer benefits.
What shapes the assumptions
First-half 2026 reported revenue growth of 0.11
Revenue growth
Raises revenue growth
Average fee per card increased from $117 to $131 year over year
Annualized fee per proprietary card
Raises operating margin
Q2 2026 pretax income equaled about 0.207 of revenue
Pretax profit conversion
Informs operating margin
Card balances and other loans grew 0.08 with a CET1 ratio of 0.104
Growth capital requirement
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 27.1% a year. Over the last 5 years it grew 12.7% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 44.7% operating margin, against the 21.0% assumed here.
- How confident is this estimate?
- Robustness 48.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Quarterly billed business
Card Member purchase volume drives merchant discount revenue, rewards expense, and future customer engagement.
$456B
reported2. Annualized fee per proprietary card
The average fee measures pricing and premium-product mix, which can raise recurring revenue without requiring equal growth in transaction volume.
$131
reported3. Quarterly principal net write-off rate
This measures realized principal credit losses on consumer and small-business card balances and directly affects provisions and profit.
2.0%
reported4. Quarterly net interest yield
This measures the spread earned on card balances and other loans after funding costs.
8.1%
reported5. Quarterly pretax profit ratio
This derived ratio shows how much total revenue remains after credit provisions and operating expenses.
20.7%
derivedBase inputs from financials
source period →Base revenue (TTM)
$43.1B
Diluted shares
679,000,000
Net cash
—
Bear
low confidence$99.66
IV / share
-69.8% vs $329.82
- Explicit cash flows
- $27.86
- Terminal value
- $71.80
- Net cash
- $0.00
- Intrinsic value / share
- $99.66
72.0% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth6.0% → 5.0% → 4.5% → 4.0% → 3.5%medium
How derived: The supplied quarterly actuals show recent growth near 0.09 and management raised its 2026 company-wide revenue-growth outlook to 0.10, but this case assumes weaker spending, slower card acquisition, and the comparatively soft Commercial Services trend cause growth to fall rapidly below that level.
Why this confidence: Recent company-reported segment trends ↑, Large departure from current management guidance ↓, Five-year macroeconomic uncertainty ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly net interest yield8.1%reported
Evidence for
- Commercial Services billed-business growth was only 0.05 in Q2 2026, materially below growth of 0.11 in U.S. Consumer Services and 0.13 in International Card Services.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Management raised its full-year 2026 revenue-growth guidance to 0.10 after first-half reported revenue grew 0.11.[AXP Q2 2026 results]· primary
Operating margin18.0%medium
How derived: Q2 2026 pretax income divided by total revenue net of interest expense was about 0.207, but this case lowers normalized profitability to 0.18 because customer-benefit, compensation, technology, and credit costs could continue rising faster than revenue.
Why this confidence: Current expense and revenue disclosures ↑, Credit losses and rewards costs are cyclical ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly principal net write-off rate2.0%reported
- Quarterly net interest yield8.1%reported
- Quarterly pretax profit ratio20.7%derived
Evidence for
- Q2 2026 total expenses rose 0.12 while revenue rose 0.10, with Card Member services expense increasing 0.50.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Q2 2026 pretax income rose 0.15 and exceeded 0.20 of total revenue net of interest expense.[AXP Q2 2026 results]· primary
Tax rate24.0%medium
How derived: The effective rate was 0.236 in Q2 2026 and 0.225 for the first half, so this case rounds upward to 0.24 to allow for an unfavorable geographic income mix and fewer discrete benefits.
Why this confidence: Current reported effective rate ↑, Geographic mix and discrete tax items ↓
No tracked driver measures this assumption yet.
Evidence for
- The Q2 2026 effective tax rate was 0.236, up from 0.187 in Q2 2025 because the prior period contained discrete benefits.[AXP Q2 2026 Form 10-Q]· primary
Evidence against
- The full-year effective tax rate was 0.215 in both 2025 and 2024.[AXP FY 2025 results]· primary
Reinvestment rate28.0%low
How derived: Card balances grew 0.08 while management continued investing in benefits, marketing, technology, and risk controls, so this case retains 0.28 of after-tax operating profit to support growth and a larger capital cushion under less favorable economics.
Why this confidence: Reported balance growth and capital ratios ↑, Bank reinvestment is not captured cleanly by conventional capital-expenditure measures ↓, Future regulatory capital requirements ↓
No tracked driver measures this assumption yet.
Evidence for
- Card balances and other loans grew 0.08 year over year, and the company reported higher spending on customer benefits, salaries, and data-processing equipment.[AXP Q2 2026 statistical tables]· primary
Evidence against
- AXP reported a Q2 2026 return on average equity of 0.364, indicating that current growth can be supported with comparatively modest retained capital if that return persists.[AXP Q2 2026 statistical tables]· primary
Terminal growth2.0%low
How derived: The Federal Reserve projects longer-run real growth of about 0.02 and inflation of 0.02, but this case limits AXP to 0.02 nominal growth because mature-market competition and credit cycles could prevent it from keeping pace with nominal economic output indefinitely.
Why this confidence: Official long-run inflation objective ↑, Terminal-period business conditions are highly uncertain ↓
No tracked driver measures this assumption yet.
Evidence for
- The Federal Reserve's longer-run inflation objective is 0.02, providing a conservative nominal floor for a mature continuing business.[Federal Reserve longer-run goals]· primary
Evidence against
- Federal Reserve participants projected longer-run real GDP growth of 0.02 in addition to longer-run inflation of 0.02, implying nominal economic growth above this assumption.[Federal Reserve July 2026 projections]· primary
Base
low confidence$155.05
IV / share
-53.0% vs $329.82
- Explicit cash flows
- $39.40
- Terminal value
- $115.65
- Net cash
- $0.00
- Intrinsic value / share
- $155.05
74.6% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth10.0% → 8.5% → 7.5% → 6.5% → 6.0%medium
How derived: Management raised 2026 revenue-growth guidance to 0.10 after first-half growth of 0.11, so the central case uses 0.10 initially and then fades toward 0.06 as the card base expands and comparisons become harder.
Why this confidence: Management guidance supported by first-half results ↑, Uneven segment growth ↓, Growth beyond the guided year ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly net interest yield8.1%reported
Price implies: 27.1% vs our 7.7% — one of several sets that fit this price
Evidence for
- Q2 2026 revenue grew 0.10, first-half revenue grew 0.11, and management raised its full-year revenue-growth outlook to 0.10.[AXP Q2 2026 results]· primary
Evidence against
- Commercial Services billed-business growth was 0.05 in Q2 2026, showing that current momentum is not uniform across the company.[AXP Q2 2026 statistical tables]· primary
Operating margin21.0%medium
How derived: Q2 2026 pretax income was approximately 0.207 of total revenue net of interest expense, so the case rounds to a 0.21 normalized margin as fee growth and scale efficiencies broadly offset customer-engagement and technology spending.
Why this confidence: Directly observable current profitability ↑, Quarterly benefit and marketing spending volatility ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly principal net write-off rate2.0%reported
- Quarterly net interest yield8.1%reported
- Quarterly pretax profit ratio20.7%derived
Price implies: 44.7% vs our 21.0% — one of several sets that fit this price
Evidence for
- Q2 2026 pretax income was $4.071 billion on $19.637 billion of total revenue net of interest expense, a ratio near 0.207.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Q2 2026 expenses increased 0.12, faster than revenue growth of 0.10, as Card Member services and employee costs rose.[AXP Q2 2026 results]· primary
Tax rate22.5%high
How derived: The first-half 2026 effective tax rate was exactly 0.225, so the central case carries that rate forward while recognizing that geographic mix and discrete items can move individual quarters.
Why this confidence: Matches the latest year-to-date reported rate ↑, Potential discrete tax items ↓
No tracked driver measures this assumption yet.
Evidence for
- AXP reported a first-half 2026 effective tax rate of 0.225.[AXP Q2 2026 Form 10-Q]· primary
Evidence against
- The quarterly effective rate moved from 0.187 in Q2 2025 to 0.236 in Q2 2026 because of discrete tax items.[AXP Q2 2026 Form 10-Q]· primary
Reinvestment rate22.0%low
How derived: With card balances growing 0.08, a CET1 ratio of 0.104, and return on average equity of 0.364, the case assumes retaining 0.22 of after-tax operating profit is sufficient to fund loan, technology, customer-acquisition, and regulatory-capital needs.
Why this confidence: Reported capital productivity and asset growth ↑, Model translation from bank capital retention to DCF reinvestment ↓
No tracked driver measures this assumption yet.
Evidence for
- Card balances and other loans grew 0.08 and risk-weighted assets reached $268.321 billion, requiring continuing funding and capital support.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Return on average equity was 0.364 in Q2 2026, which implies strong capital productivity and could permit a lower reinvestment share.[AXP Q2 2026 statistical tables]· primary
Terminal growth2.5%low
How derived: The Federal Reserve's 0.02 longer-run inflation objective and 0.02 median longer-run real-growth projection imply nominal economic growth near 0.04, so the case uses a restrained 0.025 rate for a mature premium-payments franchise.
Why this confidence: Official long-run macroeconomic projections ↑, Indefinite forecast horizon ↓
No tracked driver measures this assumption yet.
Evidence for
- Federal Reserve participants projected longer-run real GDP growth of 0.02 and longer-run PCE inflation of 0.02.[Federal Reserve July 2026 projections]· primary
Evidence against
- AXP's current revenue and billed-business growth are substantially above 0.025, so a durable premium-card advantage could justify a higher mature growth rate.[AXP Q2 2026 results]· primary
Bull
low confidence$216.87
IV / share
-34.2% vs $329.82
- Explicit cash flows
- $50.46
- Terminal value
- $166.41
- Net cash
- $0.00
- Intrinsic value / share
- $216.87
76.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth11.0% → 10.5% → 9.5% → 8.5% → 7.5%medium
How derived: First-half 2026 revenue grew 0.11 while International Card Services billed business grew at double-digit rates, so this case assumes premium-product demand, fee growth, and international expansion keep growth near current levels before a gradual fade.
Why this confidence: Strong first-half results and international growth ↑, Forecast exceeds management's current full-year outlook ↓, Multi-year persistence of premium demand ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly net interest yield8.1%reported
Evidence for
- First-half 2026 revenue grew 0.11, Q2 billed business grew 0.09, International Card Services billed business grew 0.13, and net card-fee revenue grew 0.15 in Q2.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Management's raised full-year 2026 revenue-growth guidance was 0.10, below the bull case's initial 0.11 assumption.[AXP Q2 2026 results]· primary
Operating margin24.0%low
How derived: The latest pretax ratio was about 0.207, but this case assumes faster-growing fees, low credit losses, and technology-driven scale raise normalized profitability to 0.24 despite continued spending on rewards and benefits.
Why this confidence: Fast fee growth and favorable current credit performance ↑, Material expansion above observed profitability ↓, Competitive benefit and rewards spending ↓
Measured by
- Quarterly billed business$456Breported
- Annualized fee per proprietary card$131reported
- Quarterly principal net write-off rate2.0%reported
- Quarterly net interest yield8.1%reported
- Quarterly pretax profit ratio20.7%derived
Evidence for
- Net card-fee revenue grew 0.15 in Q2 2026, net interest income grew 0.11, and provisions for credit losses declined 0.23.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Q2 2026 expenses grew 0.12, including a 0.50 increase in Card Member services expense, and the current pretax ratio remained near 0.207.[AXP Q2 2026 statistical tables]· primary
Tax rate21.0%medium
How derived: The full-year rate was 0.215 in both 2024 and 2025, so this case uses 0.21 on the assumption that favorable geographic mix and recurring tax management offset the higher first-half 2026 rate.
Why this confidence: Two years of consistent full-year tax results ↑, Latest year-to-date rate is higher ↓
No tracked driver measures this assumption yet.
Evidence for
- AXP's effective tax rate was 0.215 in both 2024 and 2025, and the company attributed Q4 2025 variation partly to geographic income mix.[AXP FY 2025 results]· primary
Evidence against
- The effective tax rate increased to 0.236 in Q2 2026 and 0.225 for the first half.[AXP Q2 2026 Form 10-Q]· primary
Reinvestment rate18.0%low
How derived: Return on average equity was 0.364 and the CET1 ratio remained 0.104 while revenue and balances expanded, so this case assumes digital distribution, fee income, and capital efficiency limit reinvestment to 0.18 of after-tax operating profit.
Why this confidence: High reported return on equity ↑, Fast balance and risk-weighted-asset growth ↓, Uncertain future regulatory capital intensity ↓
No tracked driver measures this assumption yet.
Evidence for
- Q2 2026 return on average equity was 0.364 and return on average common equity was 0.378.[AXP Q2 2026 statistical tables]· primary
Evidence against
- Risk-weighted assets grew to $268.321 billion and card balances and other loans grew 0.08, while management also increased spending on benefits, technology, and customer acquisition.[AXP Q2 2026 statistical tables]· primary
Terminal growth3.0%low
How derived: Longer-run real growth and inflation are each projected near 0.02, so this case assigns AXP 0.03 perpetual nominal growth—above the other cases but still below the approximate nominal growth of the broader economy.
Why this confidence: Rate remains below projected nominal economic growth ↑, Perpetual competitive-position assumption ↓
No tracked driver measures this assumption yet.
Evidence for
- Federal Reserve longer-run projections of 0.02 real growth and 0.02 inflation together support nominal economic growth above 0.03.[Federal Reserve July 2026 projections]· primary
Evidence against
- A perpetual company growth rate of 0.03 requires American Express to retain a durable competitive position through multiple spending and credit cycles.[AXP 2025 Form 10-K]· primary
Valuation robustness
reliability of the estimate, not a stock rating48 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 75% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 3.6% | -3.2 | -129.9% | 709M | -3.3% |
| Q1 2025 | 3.1% | 6.17 | -13.5% | 702M | -2.8% |
| Q2 2025 | 5.1% | 5.36 | -3.2% | 699M | -2.5% |
| Q3 2025 | 7.2% | 8.05 | 351.8% | 693M | -2.3% |
| Q1 2026 | 9.3% | 3.87 | -37.3% | 686M | -2.3% |
| Q2 2026 | 8.6% | 6.59 | 23.0% | 679M | -2.9% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The input uses the 2026-07-01 trailing-12-month adjusted-payout implied U.S. equity risk premium, the latest directly published observation located.
The input is AXP's regular-session closing price on 2026-09-04, the latest completed trading session.
Generated 9/5/2026, 11:50:32 PM · pipeline v1.2.0