American Express (AXP) shares have dropped approximately 20% since the start of 2026, now trading around $300, amid broader market concerns over macroeconomic and geopolitical uncertainties. However, this decline may present a compelling opportunity for long-term investors, as the company is demonstrating robust earnings growth and a commitment to shareholder returns. In its latest earnings report, American Express revealed a 10% revenue increase to $72.2 billion for 2025, with earnings per share rising 15% on an adjusted basis.
The company’s strong performance is underpinned by its pricing power and a successful strategy to attract younger consumers, particularly through premium product offerings. The recent 16% increase in its quarterly dividend, now at $0.95 per share, reflects a low payout ratio of less than 25%, indicating ample room for future hikes. Additionally, aggressive share repurchases further enhance per-share earnings, making AXP an attractive investment option.
For market professionals, American Express presents a solid entry point at current valuations, trading at around 17 times projected earnings for 2026. Its combination of strong cash flow, pricing power, and a commitment to returning capital to shareholders positions it well for sustained growth, despite potential economic headwinds.
Source: fool.com