- Company name
- American Express
- Sector
- Payments & credit cards
- About
- American Express issues charge and credit cards to consumers, small businesses, and large companies, and it runs its own card network. It earns most of its revenue from discount revenue, which is the fee that merchants pay when a customer uses an American Express card. It also earns annual card fees, which grew 16% in Q3 2026, and net interest income on the card balances that customers carry. Its premium cards, such as the Platinum Card, give rewards, travel benefits, and services, and these benefits are its largest cost. Because it is both the card issuer and the network, it sees the spending data of both the customer and the merchant. It funds its card balances mostly with customer deposits at American Express National Bank, which is regulated as a US bank. It reports four segments: US Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services.
- Thesis
- The market prices American Express at a discount because it fears that costs grow faster than revenue and that regulation can cut card profits. In Q2 2026, revenue grew 10%, but expenses grew 12%, mostly from rewards, the US Platinum Card refresh, and higher operating costs. In Q3 2026, revenue and total expenses both grew 9%, but the expense figure includes a $982 million gain from the GBTG sale. Rewards, business development and Card Member services costs grew 16%, faster than revenue. Management raised its 2026 adjusted EPS guidance to $17.60 to $17.90 and expects revenue growth of about 10%. Political risk adds a second pressure. In January 2026, the US President called for a 10% cap on credit card interest rates, and the stock fell 5% on that day. On October 8, 2026, the bank regulators issued consent orders on its financial crimes compliance program with a $350 million penalty. For the gap to close, three things must be true. Card Member spending and card fees must keep revenue growth near 10%, and expense growth without one-time gains must come back to the rate of revenue growth. Write-off rates must stay low; the US consumer net write-off rate was 1.6% in Q3 2026. No rate cap or new card law must become law, and the consent orders must not change the 2027 guidance, as the company said on October 8. The 2027 guidance with the Q4 2026 report, expected in late January 2027, is the main check. If it passes, the gap can close over the next two to four quarters. If Congress passes a rate cap or premium card costs keep growing faster than revenue, the gap can stay longer.
- Risks
- Costs can grow faster than revenue. In Q2 2026, expenses grew 12% and revenue grew 10%. In Q3 2026, rewards, business development and Card Member services costs grew 16% and revenue grew 9%. Rewards and Card Member benefits are the largest costs, and management plans to spend more on growth. Competition from other premium cards can force higher rewards.
Regulation can cut card profits. In January 2026, the US President called for a 10% cap on credit card interest rates, and bills for such a cap are in Congress. Laws that limit merchant fees or force card network competition can also reduce discount revenue, its largest revenue line.
The consent orders of October 8, 2026, require more compliance work at the company and its bank. A failure to meet them can bring more penalties or limits on the business.
A weaker economy can reduce spending and raise credit losses. Travel and entertainment spending is a large part of its business, and it falls quickly in a recession. The net write-off rate was 1.8% in Q3 2026.
Investors fear that AI tools in company expense management can move spending away from corporate cards. The stock fell sharply on a day in late February 2026 on AI disruption fears.
- Balance sheet
- Cash: $43.2B
Debt: $60.0B
Net debt: $16.8B
Ratings: Moody's A2 (stable outlook), S&P A- (stable outlook), Fitch A (stable outlook)
American Express funds itself mostly as a bank. At September 30, 2026, customer deposits were $155.0 billion, and these deposits are not part of debt here. Debt is $1.4 billion of short-term borrowings and $58.5 billion of long-term debt. Of the long-term debt, $12.2 billion was issued by its card securitization trusts. Cash and cash equivalents were $43.2 billion, including $39.3 billion of deposits at other banks, which the company keeps for liquidity. It also has a $6.0 billion committed bank credit facility that ends in September 2028. $3.5 billion was drawn on it at September 30, 2026, and the company later repaid it in full. Because the company is a lender, interest expense is a cost of its business, so net debt to EBITDA and interest cover do not apply. The Common Equity Tier 1 capital ratio was 10.9% at September 30, 2026, in its target range of 10% to 11%. In Q3 2026, it returned $2.2 billion to shareholders, $1.6 billion in buybacks of 4.8 million shares and $641 million in dividends. The ratings are the long-term ratings of American Express Company in the Q3 2026 10-Q. The rating of the bank is A3 at Moody's, A at S&P, and A+ at Fitch.
As of Sep 30, 2026.
- Checkpoints
- Oct 23, 2026: Q3 2026 results: revenue and expense growth. Passed. Watch: Revenue growth near 10% with expense growth at or below it and the 2026 EPS guidance kept passes; expenses that again grow faster than revenue or a cut to guidance fails. Outcome: Revenue grew 9% and total expenses grew 9%, helped by the GBTG gain, and the company raised its 2026 EPS guidance to $17.60 to $17.90 adjusted.
Nov 1, 2026: TheFork purchase closing. Passed. Watch: Closing by the end of 2026 as planned passes; a block by regulators or a long delay fails. Outcome: The purchase closed on November 1, 2026, for $700 million in cash, before the end of 2026 as planned.
Jan 23, 2027 (estimate): Q4 2026 results and 2027 guidance. Pending. Watch: 2027 guidance that keeps revenue growth near 10%, with no large extra cost from the consent orders, passes; lower guidance from higher costs or regulation fails.
- Recent events
- Nov 1, 2026: American Express completed its purchase of TheFork from Tripadvisor for $700 million in cash, subject to adjustments. Tripadvisor will give transition services for 12 months.
Oct 30, 2026: American Express sold $3.0 billion of senior notes: $1.5 billion of 5.447% fixed-to-floating rate notes due 2030, $1.15 billion of 5.817% fixed-to-floating rate notes due 2034 and $350 million of floating rate notes due 2030.
Oct 23, 2026: American Express reported Q3 2026 results. Revenue was a record $20.1 billion, up 9%, and EPS was $5.42, up 31%. Adjusted EPS was $4.68, up 13%, without the $982 million pre-tax gain from the GBTG sale, net of a $336 million restructuring charge. Card fees grew 16%, and the net write-off rate was 1.8%. It raised its 2026 EPS guidance to $18.30 to $18.60, or $17.60 to $17.90 on an adjusted basis, and expects revenue growth of about 10%.
Oct 15, 2026: American Express reported preliminary credit data for Q3 2026. The US consumer card net write-off rate was 1.6% for the quarter, and 1.2% of these balances were 30 days past due at September 30. The US small business card net write-off rate was 2.3%.
Oct 8, 2026: American Express and its bank agreed to consent orders from the Federal Reserve and the Office of the Comptroller of the Currency about its financial crimes compliance program. The bank agreed to pay a $350 million penalty. The company said that it had reserved part of the penalty before, that the orders do not limit its assets, and that the costs do not change its 2026 or 2027 guidance.
Sep 29, 2026: Long Lake and General Catalyst completed their purchase of Global Business Travel Group for $9.50 per share in cash. American Express sold its stake of about 30%. In May, it said that it expected about $1.5 billion of proceeds and a pre-tax gain of about $975 million, which its 2026 EPS guidance does not include.
Aug 12, 2026: American Express issued $1.6 billion of 6.450% preferred shares (Series E). It used the money to redeem all of its 3.550% Series D preferred shares on September 15, 2026.
Jul 24, 2026: American Express reported Q2 2026 results. Revenue was $19.6 billion, up 10%, and EPS was $4.53, up 11%. Card Member spending grew 9%, its fastest rate in three years after currency effects. Expenses grew 12%. It raised its 2026 revenue growth guidance to 10% and kept its EPS guidance of $17.30 to $17.90.
Jun 25, 2026: After the 2026 stress test, American Express said that its stress capital buffer stays at the minimum of 2.5% through September 30, 2027.
Jun 15, 2026: American Express agreed to buy TheFork, a European restaurant booking platform with about 50,000 restaurants in 11 countries, from Tripadvisor for $700 million in cash. It expects the deal to close by the end of 2026, after a labor consultation and regulatory approvals.