American Express (AXP.N) has forecast an annual profit largely exceeding Wall Street expectations, bolstered by consistent spending among its younger and more affluent clientele. While the company’s forecast paints a positive picture, a slight miss on holiday-quarter profits impacted its shares. American Express is a global financial services company, known primarily for its credit card, charge card, and traveler’s cheque businesses. It provides consumers and businesses worldwide with access to products, insights and experiences that enrich lives and build business success.
The results highlight a split in consumer spending habits, with many Americans curtailing expenses due to high borrowing costs and inflation, while higher-income households continue to spend on travel, dining, and luxury goods. According to CFO Christophe Le Caillec, spending by Gen Z and millennials now surpasses that of Gen X on American Express cards, a first for the company’s U.S. consumer business. This shift reflects American Express’s ongoing efforts to cultivate a younger, premium customer base.
American Express projects 2026 earnings per share to be between $17.30 and $17.90, with the midpoint exceeding analysts’ average projection of $17.41 per share. However, profit for the three months ending December 31 came in at $3.53 per share, slightly below estimates of $3.54. Citigroup analysts attributed this small difference to increased expenses, which rose 10% to $14.5 billion during the period. The company’s shares experienced a roughly 2% decline in morning trading amidst a generally weak market.
Billed business, a measure of spending on American Express cards, increased by 9% to $445.1 billion in the fourth quarter. Revenue also saw a 10% increase, reaching $18.98 billion and surpassing expectations of $18.92 billion. Looking ahead, the company anticipates revenue growth in the range of 9% to 10% for 2026, aligning with expectations. Investors are closely watching how American Express will navigate a potential 10% cap on credit card interest rates, proposed by U.S. President Donald Trump to address affordability concerns.
