"I don't think a 10% credit card cap is the answer to that. I think it would reduce the number of cards ultimately in the marketplace. I think it would reduce line sizes... it just has this sort of effect of a downward spiral from my perspective."
"The University of Michigan Consumer Sentiment Index sits at 56.6, down 12.5% year-over-year and approaching recessionary territory. Premium discretionary spending, which is the engine of the American Express model, tends to lag sentiment by one to three months."
"Revenue of $18.98 billion missed estimates by just $130 million, and net income grew 13% year-over-year. Full-year 2025 EPS came in at $15.38, up 15%. The company raised its quarterly dividend by 16%, to $0.95 per share."
American Express has declined 15% year-to-date to around $315 from a 52-week high of $387.49, while the broader market remains flat. The bear case centers on policy risk from a proposed 10% credit card interest rate cap, declining consumer sentiment at 56.6 (down 12.5% year-over-year), and significant insider selling by CEO and executives. Premium discretionary spending, core to American Express's model, typically lags sentiment by one to three months. The bull case highlights a narrow Q4 revenue miss of just $130 million, 13% net income growth, 15% full-year EPS growth, and a 16% dividend increase. Spending trends remain healthy with luxury retail up 15% and restaurant spending up 9% in Q4.
#american-express-valuation #consumer-sentiment-and-spending-trends #policy-risk-and-regulation #insider-trading-activity #credit-card-industry-fundamentals
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