American Express (AXP 1.32%) has been caught in a sell-off that looks increasingly disconnected from the company's most recent results. Fears about artificial intelligence (AI) disrupting white-collar work, along with broader geopolitical and macroeconomic uncertainty, have pushed the stock down to about $300 as of this writing.
But has the stock's sell-off gone too far?
After all, the company's latest results were excellent. The lender and credit card company closed 2025 with record revenue, double-digit earnings growth, a refreshed Platinum card in the U.S., and impressive 2026 financial guidance.
Image source: The Motley Fool.
Impressive momentum
American Express's full-year revenue, net of interest expense, rose 10% in 2025 to $72.2 billion. Earnings per share rose 10% to $15.38, or 15% excluding the prior-year gain from its sale of Accertify.
And in Q4, specifically, revenue rose 10% to $19.0 billion, and earnings per share increased 16% to $3.53.
And the growth drivers behind these results look good. Fourth-quarter card member spending increased 9%, or 8% on an FX-adjusted basis. American Express also said net card fee revenue grew at a double-digit rate for the 30th consecutive quarter.
Importantly, the credit quality of its customer base remains strong, too. Full-year net write-offs were 2%, flat from the prior year. Fourth-quarter net write-offs did tick up to 2.1% from 1.9% in the year-ago quarter, but that 2.1% is still very impressive for a credit card lender.
Of course, this is not to say the market's worries are completely unfounded. If AI does prove to be disruptive to the workforce and white-collar layoffs rise, American Express could see more pressure than other lenders since its business is focused on higher spenders. Additionally, if the geopolitical situation worsens and begins to affect consumer confidence, this could hurt cardmember spending.
A fairly valued stock
At about $300 per share, American Express trades for roughly 19.5 times earnings. But the stock also trades for only about 16.8 to 17.3 times management's 2026 earnings guidance of $17.30 to $17.90 per share.
A valuation like this is reasonable for a high-quality lender and credit card issuer with a strong outlook for 2026. Management is guiding for 2026 revenue growth of 9% to 10% and EPS growth of roughly 12% to 16%. If American Express can actually deliver that while keeping credit in line, the stock does not look overpriced at $300.
And the stock's valuation is further supported by the company's aggressive capital return program.
First, the company pays a growing dividend. Indeed, the company recently announced a 16% year-over-year increase to its dividend, giving the stock a dividend yield of 1.2% today.
But American Express is returning a lot more cash than the dividend alone suggests. In 2025, the company returned about $7.6 billion to shareholders in total -- about $5.3 billion through share repurchases and about $2.3 billion through dividends. Its aggressive repurchase program is having a material impact, as the company's average diluted share count fell about 2% in 2025, providing a tailwind to earnings per share.
NYSE: AXP
Key Data Points
So, is it time to buy American Express stock?
For investors looking for a clear bargain, probably not. American Express is still a premium business, and the stock still trades at a valuation that leaves very little room for error.
But for investors willing to accept some risk, I think this is a good entry point. The business is performing well, management is guiding to another year of strong growth, credit metrics look healthy, and the company is aggressively buying back its stock.
With this said, investors may want to consider keeping any position in the stock small -- and they should carefully monitor the uncertain macroeconomic environment we're in now and any updates from management on how its customer base is faring.
Still, even with these risks, I think the stock looks like a good stock to bet on for the long haul.
