American Express (AXP) reported strong first-quarter earnings, with revenue rising 11% to $18.9 billion and net income increasing 15% to $2.97 billion, surpassing analyst expectations. Despite these impressive results, the stock has underperformed relative to the S&P 500, presenting a potential buying opportunity for investors. The company’s total billed business reached $428 billion, reflecting a 10% year-over-year increase, indicating resilience amid rising inflation and cautious consumer spending.
Concerns around AI disrupting traditional financial services have contributed to the market’s tepid response, but Amex’s affluent customer base and strong rewards program position it well against potential challenges. Management’s guidance of 9% to 10% revenue growth through 2025 and an earnings per share target of $17.30 to $17.90 suggests continued robust performance.
For market professionals, Amex’s current valuation may offer an attractive entry point, especially given its historical ability to maintain growth even in uncertain economic conditions.
Source: fool.com