American Express (AXP) Valuation In Focus After Trump Proposal To Cap Credit Card Interest Rates

Simply Wall St.01-12

American Express (AXP) is back in the spotlight after President Donald Trump called for a one year 10% cap on credit card interest rates, sparking a sharp move in the stock and fresh questions about ...

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See our latest analysis for American Express. The regulatory headlines have come after a strong run, with American Express posting a 27.81% total shareholder return over the past year and a very large 226.68% total shareholder return over five years, even as the 1-day share price return of 1.92% and recent weekly and monthly share price returns have slipped and raised questions about whether momentum is fading or simply pausing. If this kind of regulatory shock has you reassessing your watchlist, it could be a good moment to broaden your search with fast growing stocks with high insider ownership. With American Express now trading near US$375 and modestly below some analyst targets, the key question is whether regulatory concerns have created a genuine entry point or whether the market has already incorporated expectations for future growth into the price. AdvertisementMost Popular Narrative: 5.9% Overvalued With American Express last closing at US$375.61 against a narrative fair value of about US$354.83, the current price sits comfortably above that estimate, putting the focus on what assumptions are doing the heavy lifting.  The analysts have a consensus price target of $322.235 for American Express based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $375.0, and the most bearish reporting a price target of just $265.0.  Read the complete narrative. Curious why a payment company can carry a future earnings multiple often reserved for faster growers? The answer blends mid single digit revenue assumptions with firm margin expectations and steady buybacks. Want to see exactly how those ingredients feed into that fair value line? Result: Fair Value of $354.83 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that fair value story still leans on premium card momentum and disciplined credit costs. Both could be challenged if rewards spending climbs faster than revenue or if digital alternatives chip away at card usage. Find out about the key risks to this American Express narrative. Another View: What The Market Multiple Is Saying The fair value narrative flags American Express as about 5.9% overvalued, but the market is sending a mixed signal. On one hand, the current P/E of 24.9x is cheaper than a 26.9x peer average. On the other, it sits well above a fair ratio of 20.2x and far above the US Consumer Finance industry at 9.5x, which points to clear valuation risk if sentiment cools. If the market drifts toward that fair ratio, today’s price would look full rather than cheap, especially versus sector peers. The real question for you is whether American Express has enough earnings resilience and brand strength to keep justifying this premium, or if you would rather wait for a margin of safety. See what the numbers say about this price — find out in our valuation breakdown. NYSE:AXP P/E Ratio as at Jan 2026 Build Your Own American Express Narrative If you are not fully on board with this view or simply prefer to work through the numbers yourself, you can build a version that reflects your own assumptions in just a few minutes, starting with Do it your way. A great starting point for your American Express research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? If American Express is already on your radar, do not stop there. The right screener can quickly surface other opportunities that fit how you like to invest.  Target potential value candidates by checking out these 883 undervalued stocks based on cash flows that align with your preferred balance between price and underlying cash flows. Spot possible income ideas by scanning these 12 dividend stocks with yields > 3% that could suit a portfolio focused on regular payouts. Get ahead of emerging themes by reviewing these 79 cryptocurrency and blockchain stocks that are tied to blockchain and digital asset trends.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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