Wall Street Cut Its Targets on American Express. This Morning, the Company Answers.

Research Desk · October 23, 2026

American Express corporate logo. Image via Wikimedia Commons, used for editorial identification.

It has been a month of bad headlines for American Express.

In early October, a federal bank regulator ordered the company's bank to pay a $350 million penalty over weaknesses in its anti-money-laundering program. Then the analysts started trimming.

Barclays, UBS, Evercore, and JPMorgan all lowered their price targets heading into this morning's report. Roughly half of the analysts covering the stock now rate it a Hold.

Yet very little of that caution has shown up in the numbers. And today, before the market opens, investors get the first clean look at how the company's customers spent their money this summer.

Why American Express Gets Paid Three Ways

Most people think of American Express as a credit card. It is really closer to a private club with its own toll road.

Visa and Mastercard run payment networks, but they do not issue most of their cards. Your bank does. American Express does both. It signs up the cardholder, signs up the merchant, and runs the network in between.

That means it gets paid three times. Merchants pay a fee on every purchase. Cardholders pay an annual fee for the card itself. And on balances that are carried, the company earns interest.

Think of it like a warehouse club. The membership fee comes in no matter what you buy, and the store also makes money on every cart that goes through the checkout. American Express collects at the door and at the register.

Its customers also tend to be the most affluent spenders in the country. When budgets tighten, they are usually the last to cut back on travel, dining, and the purchases that run through these cards.

The Numbers Behind the Card

Last quarter, American Express earned $4.53 a share, ahead of the $4.41 Wall Street expected. It has beaten estimates in three of its last four quarters.

For this morning's report, analysts expect revenue to rise about 9% to roughly $20.1 billion. They expect U.S. consumer spending on the cards to grow close to 10%, and net interest income to climb about 11%.

The figure that matters most for long-term holders may be the average fee per card, which analysts expect to rise about 12%. Customers are not just keeping their premium cards. They are paying more for them.

Management's full-year target calls for earnings of $17.30 to $17.90 a share. And the quarterly dividend now stands at $0.95, or $3.80 a year.

The Blemish Worth Naming

Honesty requires naming two real concerns.

The first is compliance. Alongside the $350 million penalty, the company agreed to orders from both the Federal Reserve and the Office of the Comptroller of the Currency to fix its anti-money-laundering controls. Those fixes cost money and management attention.

The second is cost. The rich perks that justify a high annual fee, from airport lounges to travel and dining credits, are expensive to provide. Analysts expect those customer engagement costs to rise with spending, and they forecast lower pre-tax income in both the consumer and commercial segments this quarter.

Competition for premium cardholders is also heating up as big banks roll out rival cards of their own. The question this morning is whether growth in fees and spending can outrun the cost of keeping those customers happy.

What the Price Tag Looks Like Now

At about $316, American Express trades near 17 times forward earnings. That is close to its own recent history and well below the multiples on many of the market's technology leaders.

The average analyst price target is about $369, roughly 17% above the current price. Even after the recent cuts, the lowest of the new targets, $320 from Evercore, still sits above today's price.

The bear case has a number attached. If the market decided American Express deserved only 14 times the low end of its own earnings guidance, the stock would be worth about $242, roughly 24% below today.

That is the scenario a buyer should be prepared to sit through if spending slows or costs rise faster than fees.

The Bottom Line

American Express has spent a month absorbing a regulatory fine and a string of lowered targets. The business has spent that same month doing what it usually does: collecting fees from merchants and members at the same time.

For an investor who wants exposure to the strongest part of the American consumer, without paying a technology-stock multiple, few companies are more direct.

This morning's report will show whether the caution was warranted. With the stock well off its high and the dividend at $3.80 a year, patient investors are being offered a better entry than they have had in a while.