TenQ

The American Express story

American Express issues cards and runs their payment network, with growth depending on whether premium membership benefits keep driving spending faster than their costs rise.

Written from American Express's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $306.33share price, last close
  • $206.9Bmarket value
  • 17/36TenQ Score checks passed

The story in brief

  • Spending gains momentum. Card Member spending grew 9 percent in the quarter to June 2026, the highest rate in three years on an FX-adjusted basis.
  • Benefits carry costs. Expenses rose 12 percent to $14.5 billion in the quarter to June 2026, faster than revenue growth of 10 percent, partly reflecting Platinum benefits and higher spending.
  • Reserves helped earnings. Credit loss provisions fell to $1.1 billion from $1.4 billion a year earlier in the quarter to June 2026, reflecting a reserve release rather than lower net write-offs.

What drives the business

  • American Express combines card issuance, merchant relationships and its own network, generating revenue primarily from spending and secondarily from finance charges and fees across U.S. Consumer Services, Commercial Services, International Card Services and Global Merchant and Network Services.
  • Its premium membership model uses rewards, travel and dining benefits to attract high-spending customers, whose spending on company-issued cards reached $1,670 billion in 2025.
  • Delta Air Lines is its largest strategic partner, with a cobrand agreement through the end of 2029 and a portfolio representing approximately 13 percent of worldwide billed business and approximately 21 percent of worldwide Card Member loans as of December 2025.
  • Following the 2025 refresh of its U.S. Consumer and Business Platinum cards, American Express reported in the quarter to June 2026 that Platinum was the fastest growing portfolio in its U.S. Consumer business.
  • The proposed acquisition of TheFork, announced in the quarter to June 2026, would expand its dining platform with 50,000 restaurants across 11 countries, alongside its existing Resy and Tock businesses.

What the price assumes

TenQ does not measure the growth implied by American Express's price through a reverse DCF because free cash flow does not measure earnings for a bank holding company.

Its earnings multiple of 18.63 exceeds its historical comparison of 14.46, failing TenQ's check for a lower multiple than its own history.

Revenue grew 10.7% over the last twelve months, below its annual growth pace of 11.0% over the last three years and the 34.4% sector benchmark used in TenQ's growth check.

What could change the story

  • The reserve release reduced provisions in the quarter to June 2026, but net write-offs increased and the principal-only net write-off rate remained flat at 2.0 percent, leaving credit performance important to earnings.
  • American Express fails TenQ's efficiency check, with an efficiency ratio of 73.9% against a sector benchmark of 30.2%, while higher benefit usage and operating expenses are adding costs.
  • Competition for premium customers and cobrand partners could increase the cost of rewards, lounge access and dining benefits needed to retain members.
  • Weaker consumer or business confidence could reduce spending, while pricing regulation and reduced merchant acceptance could affect revenue from the network.
  • TheFork still requires labor consultation and regulatory approvals, and closing the transaction would leave integration and the realization of expected benefits unresolved.

What to watch next

  • The July 2026 release raised full-year 2026 revenue growth guidance to 10 percent while retaining earnings per share guidance of $17.30 to $17.90, with management planning to reinvest the stronger revenue performance.
  • Subsequent spending growth, card fee growth and Platinum portfolio performance will show whether membership investments continue to attract and engage customers.
  • Expense growth relative to revenue growth will show the cost of that engagement, while provisions, reserve changes and net write-offs will distinguish credit improvement from reserve-driven earnings support.

Sources

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