American Express' Solid Revenue, Spending Trends Drive Analyst Optimism

RBC Capital analyst Jon G. Arfstrom maintained an Outperform rating on American Express Co AXP with a price target of $310 on Monday.

Last week, American Express reported fiscal first-quarter 2025 results. The company’s revenue (net of interest expense) increased 7% to $16.97 billion, topping the analyst consensus estimate of $16.94 billion. 

GAAP EPS of $3.64 topped the analyst consensus estimate of $3.47. The revenue increase was primarily driven by strong Card Member spending, higher net interest income supported by growth in revolving loan balances, and accelerated card fee growth.

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American Express reiterated a revenue outlook of $71.22 billion-$72.54 billion (up by 8%-10% Y/Y) versus a consensus of $71.34 billion subject to the macroeconomic environment. It reaffirmed EPS of $15.00–$15.50 versus the consensus of $15.25.

Arfstrom noted the core results as favorable, with core revenue and billing trends mainly showing consistent growth.

Total revenues on a FX adjusted basis increased 8% year over year, or 9% when adjusted for the leap year impacts from the prior year.

Overall, the analyst noted positive management commentary and that billings trends showed consistency throughout the quarter and into early April.

Management noted that most customer types and spending categories are showing stability or modest improvement relative to 2024. Airline spending, however, decelerated.

Overall, Arfstrom appreciated management’s confidence in the durability of their customer base, spending trends, and revenue outlook.

The analyst also noted that management will continue to invest in the business to achieve longer-term goals, regardless of the potential for slower revenue growth, and will balance the growth and profitability objectives.

The company maintained 2025 EPS guidance of $15.00 to $15.50 and revenue growth for the full year to be in the 8% to 10% range. Arfstrom called that a positive.

Price Action: AXP stock is down 4.11% at $240.93 at the last check on Monday.

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