American Express Shares Dip After Q4 Earnings Narrowly Miss Estimates; Long-Term Outlook Remains Bullish

Shares of American Express (AXP) edged lower Friday after the financial services giant reported quarterly earnings that came in just shy of Wall Street's expectations. However, the company's robust revenue performance and an upbeat forecast for 2026, coupled with a planned dividend increase, painted a picture of sustained underlying strength.

For the critical holiday quarter, American Express posted adjusted earnings per share of $3.53, up from $3.04 a year ago but a cent below the $3.54 consensus compiled by FactSet. Revenue, net of interest expense, climbed 10% year-over-year to $18.98 billion, slightly exceeding the $18.92 billion analysts had anticipated.

The market's immediate reaction was a sell-off, with shares falling more than 3% in afternoon trading. Year-to-date, the stock is down over 6%, reflecting broader concerns about consumer spending resilience and credit quality in a higher-interest-rate environment.

Looking beyond the quarterly noise, management provided a bullish multi-year outlook. The company projected 2026 EPS in the range of $17.30 to $17.90, which would represent sequential growth from its 2025 adjusted EPS of $15.38. Revenue is expected to grow 9% to 10% annually. These targets align closely with, or slightly exceed, current Street expectations of $17.45 EPS and $78.68 billion in revenue for 2026.

"Our results reflect the enduring strength of our premium, membership-based model," said CEO Stephen Squeri on the earnings call. He highlighted "strong" card member spending throughout 2025 and noted that card fee growth has now expanded at a double-digit pace for 30 consecutive quarters. "We maintained excellent credit quality while continuing to invest in the services and benefits that drive our competitive advantage."

Segment performance was broadly positive. U.S. Consumer Services net revenue led the way with a 12% jump to $8.38 billion. International Card Services surged 17% to $3.29 billion, indicating successful global expansion. Commercial Services and Global Merchant & Network Services grew 6% and 4%, respectively.

In a clear signal of confidence in its financial health and future cash flows, American Express announced plans to raise its quarterly dividend by approximately 16% to $0.95 per share, beginning this quarter.

CFO Christophe Le Caillec pointed to significant untapped potential within the existing customer base, particularly in savings products. "With less than 10% of our U.S. consumer card members currently holding a high-yield savings account with us, we see a long runway for growth," he told analysts, outlining a key pillar of the company's strategy to deepen customer relationships.

Market Voices

Eleanor Vance, Portfolio Manager at Sterling Trust: "This is a classic case of the market missing the forest for the trees. A one-cent EPS miss is statistically noise. The core metrics—revenue beat, stellar fee growth, impeccable credit, and raised guidance—all tell a story of a company executing flawlessly. The dividend hike is the exclamation point."

Marcus Thorne, Independent Financial Analyst: "The guidance for 2026 is ambitious, presuming a soft economic landing and no pullback in high-end consumer spending. While the model is powerful, AmEx is not immune to a downturn. The stock's reaction today suggests investors are starting to price in that risk, despite the optimistic long-term targets."

Rebecca Shaw, Consumer Finance Blogger at 'The Balance Sheet': "Another quarter, another dividend raise for shareholders while cardholders face some of the highest annual fees in the industry. The 'excellent credit quality' Squeri boasts about is built on catering to the wealthiest consumers, leaving everyone else with less generous options. It's a great business model if you're in the 1%—either as a customer or an investor."

David Chen, Fintech Strategist: "The international growth number is the standout here. A 17% surge shows AmEx is successfully challenging local players and Visa/Mastercard abroad. Their focus on high-net-worth individuals globally is a differentiated and lucrative strategy that seems to be paying off handsomely."