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American Express (AXP) recently posted impressive third-quarter earnings, which has driven a fresh wave of market optimism. The company has raised its full-year revenue and EPS guidance. This decision signals management’s upbeat outlook on ongoing business momentum.

See our latest analysis for American Express.

American Express shares have rallied this year, recently closing at $357.56 after a series of upbeat announcements, including stronger-than-expected third-quarter results, the launch of a refreshed platinum card, and a successful $2 billion bond offering. With a 19.8% share price return so far in 2025 and an impressive five-year total shareholder return of 316.9%, momentum appears to be building as the company doubles down on premium products and deepens its moat.

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With American Express stock hovering near all-time highs after stellar results, investors may wonder if the recent rally has left little room for upside, or if there is still a compelling opportunity to buy before further growth is fully priced in.

With American Express’s fair value currently pegged below the last close, the most popular narrative points to the shares trading at a premium. The story behind this valuation involves both the company’s track record and its future growth blueprint.

“Sustained momentum in acquiring younger (Millennial and Gen Z) cardholders, with these groups showing strong spend growth and lower delinquency rates compared to industry averages, suggests a successful strategy in capturing the next generation of affluent consumers, which should drive future billed business and support earnings stability.”

Read the complete narrative.

Want to know what powers this rich price tag? The narrative revolves around bold, double-digit top-line projections, robust profit margins, and a future earnings multiple that tops industry norms. Find out which financial levers analysts are betting on, and whether they are realistic or too optimistic.

Result: Fair Value of $338.24 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, there are still clear risks, including intensifying competition and shifting consumer payment preferences, which could challenge American Express’s premium growth trajectory.

Find out about the key risks to this American Express narrative.

Looking at American Express through the lens of its price-to-earnings ratio paints a mixed picture. Although it trades at 23.7x earnings, this is lower than similar peers averaging 29.4x. However, it is notably higher than the broader industry average of 10.1x and above the fair ratio of 21.5x analysts believe the market could eventually reflect. This gap suggests investors are paying a premium for quality and track record, but also raises questions about potential downside if growth expectations are not met. Is the premium justified, or is caution warranted?

See what the numbers say about this price — find out in our valuation breakdown.

If you see things differently or want to dig into the numbers on your own, there’s nothing stopping you from drawing your own conclusions in just a few minutes, and Do it your way

A great starting point for your American Express research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include AXP.

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