American Express' (AXP 1.39%) stock has rallied about 160% over the past five years. The financial services giant remained an evergreen investment, even as inflation, rising interest rates, geopolitical conflicts, and other macroeconomic headwinds rattled the global economy. Let's see if its stock will keep rising through the end of the decade.
Why is American Express an evergreen investment?
American Express is often considered a credit card company, but it doesn't operate the same business model as Visa (V 0.80%) and Mastercard (MA 1.39%). Visa and Mastercard don't issue their own cards; they partner with banks to co-issue branded cards, earning "swipe fees" whenever those cards are used. They don't handle those accounts or collect the payments.
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American Express is a bank, card issuer, and payment network operator. It takes on more risk by issuing its own cards and taking on that debt, but it also earns interest income and annual fees from those accounts. That business model insulates it from interest rate swings.
If rising interest rates curb consumer spending and reduce its swipe fees, it can offset that pressure with higher net interest income. If declining interest rates reduce its net interest income, it can rely on its credit card segment's swipe fees and annual fees.
American Express also mainly targets higher-income consumers and stable businesses to reduce its credit risk. That strategy reinforces its appeal as a status symbol and further differentiates it from Visa and Mastercard. Less than 1% of all its consumer, business, and corporate loans were delinquent by more than 30 days at the end of 2025.
NYSE: AXP
Key Data Points
Where will American Express' stock be in 2030?
From 2025 to 2028, analysts expect American Express' EPS to rise at a 14.5% CAGR. If it matches those estimates, grows its EPS at a 14.5% CAGR from 2028 to 2030, and still trades at 20 times its current year's earnings, its stock could rise 36% to $462 by the final year.
American Express, Visa, and Mastercard all face near-term pressure from demands for lower swipe fees and the Trump Administration's proposed 10% cap on credit card interest rates. However, American Express can offset that pressure by locking more customers into its higher-fee premium cards, investing in its digital services, and expanding overseas. It should also continue to reward its patient investors with consistent buybacks and dividend hikes.
American Express isn't an exciting growth stock, but it's a safe stock to buy, hold, and forget for a few decades. That's probably why it was one of Warren Buffett's favorite long-term holdings.
