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We came across a bullish thesis on American Express Company on Chit Chat Stocks Newsletter’s Substack by Brett Schafer. In this article, we will summarize the bulls’ thesis on AXP. American Express Company’s share was trading at $298.59 as of June 20th. AXP’s trailing and forward P/E ratios were 20.85 and 19.76, respectively, according to Yahoo Finance.
A close-up of a hand holding a credit card, representing the companies multi-level payment services.
American Express remains a high-quality business with strong long-term potential, but the author is holding out for a broader market panic to buy at more attractive valuations. Q1 2025 results reaffirmed the company’s strength: shares outstanding declined 3% YoY, the dividend was raised by 17%, and billed business grew 7% excluding Leap Day, driven by 14% growth from Gen Z and Millennials and 13% internationally.
Stable write-off rates and 3.4 million new card acquisitions signal robust customer engagement. American Express continues to strengthen its network effects—more cards lead to greater merchant value—and is gaining ground internationally, especially among younger consumers. With $4.4 billion spent on rewards last quarter, earnings still rose, thanks to the company’s vertically integrated model.
Unlike Visa or Mastercard, AmEx owns the network and the customer relationship, amplifying its competitive edge as it scales. 2025 EPS guidance starts at $15, implying a forward P/E of 17.7—solid, though not yet a bargain. The author sees the potential for 10%+ annual EPS growth driven by GDP-plus revenue expansion, inflation tailwinds, and share buybacks. A key catalyst this year is the expected Platinum Card revamp, which may see the annual fee rise to $1,000 and help sustain 20% card fee revenue growth.
While current performance is impressive, the author prefers to wait for market-driven price weakness, particularly from consumer stress events, to accumulate shares around 10x normalized earnings. Given its durable growth and competitive moat, AmEx remains a “never sell” candidate—if bought at the right price.
Previously, we covered a bullish thesis on American Express Company by Daan Rijnberk in April 2025, which highlighted its vertically integrated model, premium customer base, and strong international growth. The company’s stock price has appreciated by approximately 17% since our coverage. This is because the thesis played out. Brett Schafer shares a similar view but emphasizes buying during broader market dislocations.
American Express Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 75 hedge fund portfolios held AXP at the end of the first quarter, which was 71 in the previous quarter. While we acknowledge the risk and potential of AXP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
