While the Nasdaq was shedding about 2.6% on Thursday and Meta was falling 7%, American Express was quietly doing something unusual for a financial stock: its cardholders kept spending.

That disconnect is the core of the AXP opportunity right now. The stock has fallen 12.14% year to date, badly trailing the S&P 500. Yet the underlying business has delivered ten consecutive quarters of double-digit revenue growth and beat EPS estimates in three of the last four.

The Business

American Express is not a bank in the traditional sense. It earns from card fees, merchant discount rates, and net interest income, but its premium membership model insulates it from the kind of subprime credit stress that drags down consumer lenders when the economy wobbles. Net card fee revenue has been growing at a double-digit rate for more than 30 consecutive quarters, and management continues to highlight the Platinum portfolio as a key driver in U.S. Consumer. Millennials and Gen-Z cardholders, who management identifies as representing greater lifetime value, continue to drive new account growth.

Why Wall Street Is Paying Attention

Q3 results are out this morning. Going in, consensus called for EPS of roughly $4.58 on revenue of $20.12 billion. TipRanks reported an earnings beat and raised guidance, the kind of combination that historically moves AXP shares meaningfully higher in the session following a report.

BMO Capital Markets initiated coverage this month with an Outperform rating and a $380 price target, citing the premium-card ecosystem. At a trailing P/E of approximately 19.7x, AXP trades only modestly above its five-year median of 18.75x, a slim premium for a business where analysts project 14.5% EPS growth in 2027, from a $17.65 base to $20.21 per share.

What’s Driving the Opportunity

The case here is asymmetric. AXP has a cardholder base that skews affluent. That matters in an environment where higher energy prices and persistent inflation can squeeze lower-income consumers hardest. The high-spending member who travels business class and charges corporate events is still spending.

In Q2, Card Member spending grew 9% on an FX-adjusted basis. The company raised full-year revenue growth guidance to 10% after that quarter. A repeat, or any upward revision to guidance, directly addresses the market’s remaining skepticism about whether AXP’s momentum holds in the back half of 2026.

What Could Go Wrong

Rising operating expenses are the clearest risk. In Q2, operating costs rose 12% to $14.5 billion. If that trend continued into Q3, margin pressure could offset the topline strength and limit any stock reaction. Investors also received news that American Express National Bank paid a $350 million civil penalty tied to Bank Secrecy Act and anti-money laundering program deficiencies. Management said guidance was unaffected, but regulatory overhangs rarely fully disappear in a single quarter.

Credit metrics are the other watch point. The premium base has outperformed through past cycles, but net write-offs and reserve builds are what the market actually reads first when the number crosses. A deteriorating credit line alongside a revenue beat has historically faded, while the reverse has held.

Credit metrics rarely move in isolation from what the broader banking sector is signaling. Private credit exposure and reserve language from major bank earnings have become the market’s early-warning system for consumer credit stress.

The Bottom Line

AXP is a premium business trading at a discount to the market, in a year when the market itself has re-rated. The category of consumer it serves has not slowed. Earnings just confirmed whether that resilience translated into the third quarter. If guidance moves higher again, the gap between AXP’s 12% loss and the S&P 500’s gain starts to look like one of the more straightforward re-ratings available today.