"The Q4 miss masks underlying strength in American Express's premium customer strategy. The September 2025 Platinum Card refresh drove exceptional engagement, with management noting "some of the lower cost of acquisition for Platinum in the last 2 years" despite raising the annual fee to $325. Card fee revenue reached a record $10 billion in 2025 and is expected to accelerate in H2 2026 as renewals hit at higher price points."
"The company's strategic shift toward fee-paying premium products improved marketing efficiency, with fee-paying acquisitions growing 8 percentage points year-over-year. Card member spending grew 9% (8% FX-adjusted) in Q4, demonstrating resilient affluent consumer demand even as the broader economy faces uncertainty. With a forward P/E of 20x against expected 13-16% EPS growth, American Express trades at a valuation that reflects its expected earnings growth trajectory."
American Express reported Q4 2025 EPS of $3.53 and revenue of $18.98 billion, missing Wall Street estimates. Shares fell 3.7% to $345.41. The September 2025 Platinum Card refresh drove exceptional engagement and lower acquisition costs despite an annual fee increase to $325. Card fee revenue reached a record $10 billion in 2025 and is expected to accelerate in H2 2026 as higher-priced renewals occur. Fee-paying acquisitions grew eight percentage points year-over-year and cardmember spending rose 9% (8% FX-adjusted) in Q4. Forward P/E is about 20x versus expected 13–16% EPS growth, with a 16% dividend increase and 34% ROE. Key monitoring points include Platinum renewal momentum, marketing efficiency sustainability, and retention at higher fee levels.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]