Okay, American Express. $232 billion market cap. Fine. Berkshire Hathaway likes it. Whatever. They’ve had a good run, 177% total return over five years. Which, let’s be honest, is practically asking for a correction. It’s like they’re daring the market to pull the rug out. And you know what? It probably will. Not immediately, of course. That would be too straightforward. It’ll be a slow, agonizing decline, punctuated by moments of false hope. But I digress. We’re supposed to be looking at 2026. Three predictions. This is already exhausting.
The Youth Problem
So, they’re getting a lot of new cardholders from Millennials and Gen Z. 65% of new cards, apparently. Which means…what? That these kids don’t remember a time without reward points? It’s unsettling. I mean, what are they rewarding them for? Spending money they don’t have? It’s a vicious cycle! And the CFO, Christophe Le Caillec – a name I’m already mispronouncing in my head – is thrilled. “Largest share of U.S. consumer spending,” he says. Great. More spending. Just what we need. The implication is that these kids will eventually have income. Like that’s some groundbreaking revelation. They’ll spend more. And Amex will make more money. It’s…predictable. And frankly, a little insulting to those of us who built our credit the hard way – by carefully paying off bills and resisting the urge to buy avocado toast.
Financial Performance: It’s Good, Okay?
Revenue up 100% over five years. Earnings per share up 308%. They’re practically bragging. Look, it’s good. I get it. They made money. But let’s not pretend it’s some Herculean feat. They had a little help from a conveniently low baseline in 2020. Easy comparisons. It’s like winning a race when everyone else has flat tires. They’re forecasting 9-10% revenue growth in 2026. And 14% EPS growth. Fine. They’re good at projecting. They’re also good at charging high fees. People pay them. They keep spending. It’s a self-perpetuating cycle of…well, it’s irritating. It’s just…irritating. And they’re all patting themselves on the back.
The Stock: Don’t Get Any Ideas
Look, it’s a quality business. I’ll concede that. But that doesn’t mean you should rush out and buy the stock. Valuation matters. It’s trading at a P/E of 21.9. Twenty percent higher than three years ago. Twenty percent! That’s…aggressive. It’s like they’re daring you to think it’s a bargain. And the worst part? Everyone’s already talking about how great it is. The hype is deafening. It fell 10% in 2022, which was nice. A little reality. But then it bounced back with “phenomenal double-digit gains.” Of course it did. It always does. So, my prediction for 2026? A breather. A correction. A down year. Just to mess with everyone. It’s the only logical outcome. And frankly, I’m bracing for it. I’m preparing myself. It’s going to be unpleasant. But it’s inevitable.
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2026-02-19 22:15