American Express Shares Climb on Earnings Beat and Fee-Driven Resilience Volume Ranks 101st at $1.29 Billion

Market Snapshot

American Express (AXP) shares rose 2.08% on January 16, 2026, with a trading volume of $1.29 billion, ranking 101st in daily market activity. The stock’s performance followed strong third-quarter 2025 results, including a 19% year-over-year earnings per share (EPS) increase to $4.14 and revenue growth of 11% to $18.43 billion, which exceeded expectations. Pre-market trading saw a surge of 8.16% to $349.48, driven by outperforming fundamentals and raised full-year guidance. Despite recent volatility, AXP’s annual card fees are approaching $10 billion, with 36% return on equity, reflecting sustained profitability in its premium customer base.

Key Drivers

American Express’s recent stock performance reflects a combination of robust financial results and evolving market dynamics. For Q3 2025, the company surpassed earnings and revenue forecasts, with EPS of $4.14 (up 19% YoY) and revenue of $18.43 billion (up 11% YoY). These results were fueled by a 9% year-over-year increase in total card member spending, driven by a 13% rise in international transactions and a growing share of younger demographics (Millennials and Gen Z), who now account for 36% of spending. Management raised full-year revenue growth guidance to 9–10% and projected EPS between $15.20 and $15.50, underscoring confidence in long-term mid-teens EPS growth.

The company’s strategic focus on premium cardholders and fee-based revenue has insulated it from some risks faced by competitors. Unlike peers reliant on interest income, American Express derives significant revenue from annual fees and transaction-based income, a model less vulnerable to proposed regulatory changes. For instance, President Trump’s proposed 10% cap on credit card interest rates, which triggered a broader sell-off in the sector, has been countered by analysts emphasizing AXP’s fee-centric structure. JPMorgan analysts, for example, highlighted that American Express’s profitability is less exposed to interest rate compression compared to rivals like Synchrony Financial. This differentiation has attracted bullish commentary, with Evercore ISI setting a $400 price target for AXP.

However, regulatory uncertainty remains a drag on investor sentiment. The 10% interest rate cap proposal has sparked concerns about potential revenue compression and business model adjustments, particularly if the policy is enacted. While American Express’s current credit lending and risk metrics remain stable, the long-term implications of such regulations could reshape the credit card industry. Analysts have noted that Wall Street bankers are lobbying against the cap, warning it could force account closures or reduce lending, adding to near-term uncertainty. Despite this, some observers argue the recent dip in AXP’s stock price presents a “buy-the-dip” opportunity, given its strong balance sheet and premium customer base.

Internally, the company is prioritizing long-term value creation through disciplined capital allocation and technological innovation. Management emphasized investments in GenAI for underwriting and claims processing, aiming to improve decision-making and customer conversion rates. Additionally, AXP’s focus on expanding its global premium customer base—highlighted by CEO Steve Squeri—positions it to capitalize on high-net-worth individuals and businesses seeking premium travel and loyalty benefits. These initiatives align with the company’s strategy to maintain its 36% return on equity and sustain double-digit card fee growth for 29 consecutive quarters.

Analyst sentiment remains mixed, with AXP currently holding a “Hold” rating. While some institutions, such as Thames Capital Management LLC, have reduced holdings, others like Focused Investors LLC maintain a $148.18 million position, reflecting confidence in its long-term prospects. The divergence in ratings underscores the balance between optimism over AXP’s financial resilience and caution regarding macroeconomic and regulatory headwinds. As the company navigates these dynamics, its ability to maintain high customer retention and adapt to evolving regulatory landscapes will be critical to sustaining its market position.