Shares of premium credit card and payments leader American Express (AXP 1.55%) are down about 12% so far in 2026 as of this writing, including a sharp one-day slide late in February as AI disruption fears spooked investors in American Express stock.
Despite the stock's weakness recently, the underlying business looks great. The company just closed 2025 with record revenue and guided to another year of strong growth. Is this sell-off, therefore, a buying opportunity?
Image source: Getty Images.
An impressive growth story
American Express finished 2025 with total revenue, net of interest expense, of $72.2 billion -- up 10% year over year. And the company's full-year earnings per share was $15.38. Importantly, that earnings per share figure was up 15% when you exclude the company's prior-year one-time gain from the sale of Accertify.
Additionally, growth was robust in the final quarter of the year, too. The integrated payments company's fourth-quarter revenue rose 10% year over year to $19.0 billion. That pace was a slight slowdown from third-quarter revenue growth of 11%, but card member spend excluding the impact of foreign exchange grew at 8% year over year in both the third and fourth quarters of 2025.
Further, the company's write-off rates remain best-in-class. For 2025, the company reported a net write-off rate of 2%, flat year over year. In the fourth quarter, the net write-off rate ticked up to 2.1% from 1.9% a year earlier. But this is still exceptionally low for a credit card lender.
Then there's American Express' aggressive capital return program.
"We returned $7.6 billion of capital to our shareholders [during 2025], including $2.3 billion of dividends and $5.3 billion of share repurchases," American Express's chief financial officer Christophe Le Caillec said during the company's fourth-quarter earnings call.
And management announced a 16% dividend increase for 2026.
A fair valuation
Today, the stock currently commands a price-to-earnings ratio of 21 -- a valuation I believe the company should be able to live up to over the long haul.
Consider the company's robust outlook. For the full year of 2026, American Express guided for revenue growth of 9% to 10% and earnings per share of $17.30 to $17.90. Against 2025 earnings per share of $15.38, that implies roughly 14% growth at the midpoint.
Additionally, American Express is investing heavily in its premium value proposition, including the recent refresh of its Platinum card. The overhaul of its consumer and business Platinum cards in the U.S. last year, which includes a higher fee but also a huge increase in the value of perks it offers its members, should help keep some of its most important members engaged and provide a tailwind to the company's card fee revenue, as the company only recently started applying the new annual fee for U.S. Platinum card members who are reaching their renewal anniversaries -- and for those first members to face the higher fee at their renewal anniversary, the company has "seen no change" to its "very high rention rates relative to pre-refresh," said Le Caillec during the company's fourth-quarter earnings call.
Credit, of course, is always a key risk for a company like American Express. The stock could sell-off if the market starts assuming higher charge-offs are coming. So investors will need to keep a close eye on economic conditions that could negatively impact American Express' members' credit profiles.
NYSE: AXP
Key Data Points
So, is the stock a buy? I think it is.
Sure, the stock isn't cheap. But the company is still producing double-digit revenue growth and mid-teens earnings growth, and it's executing on large, ongoing capital returns. Even more, the stock's recent sell-off improves the risk-reward proposition, as less optimism is now priced in.
Of course, if 2026 sees a deterioration in spending trends or credit conditions, I would revisit my bullish stance. But with management still guiding to strong growth and still buying back stock aggressively, I think American Express is a buy on this dip.
