American Express, that purveyor of platinum and status, finds itself, as of late February, down some twelve per cent for the year. A trifle alarming, perhaps, but hardly a catastrophe. The market, predictably, has succumbed to a fit of the vapors over these digital disruptions. One trusts the gentlemen in charge have a robust gin supply to weather the storm.
Despite this modest setback, the accounts remain, shall we say, presentable. Revenue for 2025 reached $72.2 billion – a perfectly respectable sum. Earnings per share, a figure increasingly divorced from reality, reached $15.38. A tidy profit, even after discounting the rather convenient windfall from the disposal of Accertify. One suspects the accountants are quite pleased.
An Impressive, If Predictable, Performance
The final quarter proved similarly robust, revenue edging upwards to $19.0 billion. A slight deceleration from the previous quarter, naturally. One cannot expect perpetual acceleration in this world. Card member spending, excluding the vagaries of exchange rates, grew at a steady eight per cent. A comfortable pace for a company of its stature.
Remarkably, their write-off rates remain enviably low, a mere two per cent. A testament to the discerning clientele they attract, or perhaps a cleverly disguised arrangement with the debt collectors. The fourth quarter saw a slight uptick to 2.1 per cent, but this is, as they say, within acceptable parameters. One suspects a few extravagant holidays are to blame.
And, of course, the shareholders must be appeased. A generous $7.6 billion was returned to them, comprising dividends and share repurchases. A gesture of goodwill, or a shrewd tactic to maintain a favourable share price? The motives of these financial titans are rarely transparent.
A further sixteen per cent increase in the dividend for 2026 has been announced. A rather vulgar display of wealth, perhaps, but one cannot deny its effectiveness.
A Valuation One Might Consider
The current price-to-earnings ratio of 21 appears, at first glance, reasonable. Whether the company can sustain this valuation remains to be seen. Their guidance for 2026 suggests revenue growth of nine to ten per cent and earnings per share of $17.30 to $17.90. A respectable projection, assuming the world does not descend into chaos.
The recent overhaul of the Platinum card, with its increased fees and enhanced perks, is a particularly shrewd move. One suspects the benefits are largely illusory, but the clientele, ever susceptible to flattery, will undoubtedly flock to it. The retention rates, they claim, remain high. One can only assume they are not asking the right questions.
Credit, naturally, remains a perpetual concern. A downturn in the economy could, of course, trigger a wave of defaults. Investors would be wise to keep a watchful eye on the economic indicators, though one suspects they are largely powerless to prevent the inevitable.
Is the stock a buy? One is inclined to believe so. It is not cheap, certainly, but the company continues to generate respectable growth and return capital to shareholders. The recent sell-off, while hardly dramatic, does improve the risk-reward proposition.
Should economic conditions deteriorate or spending habits change, one would, of course, reconsider one’s position. But with management still confidently projecting growth and aggressively buying back stock, American Express appears, for the moment, a reasonably safe harbour in a turbulent sea.
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2026-02-25 22:13