To The Moon

$American Express(AXP)$ is scheduled to deliver its earning result for fiscal Q2 2025 on 18 July before the market open.

Earnings Per Share (EPS): consensus EPS forecasts is expected to be around $3.86–$3.87.

Revenue: consensus estimate for revenues is approximately $17.69 billion, representing healthy year-over-year increases at ~$17.7B (+8% YoY)

American Express (AXP) delivered strong results in fiscal Q1 2025, beating analyst expectations for earnings per share (EPS) while revenue aligned with forecasts. The company also maintained its full-year 2025 guidance, indicating confidence in its continued performance.

American Express (AXP) Fiscal Q1 2025 Earnings Summary:

Revenue: $17.0 billion, up 7% year-over-year (8% on an FX-adjusted basis, or 9% excluding leap year impact). This was driven by higher net interest income from growth in revolving loan balances, increased Card Member spending, and strong card fee growth.

Net Income: $2.6 billion, up 6% year-over-year.

Diluted EPS: $3.64, a 9% increase year-over-year, surpassing analyst estimates of $3.48.

Card Member Spending: Grew 6% overall (7% excluding leap year impact). Spending on goods and services continued to grow faster than in 2024, while travel and entertainment (T&E) spending remained strong, particularly in restaurants and lodging.

New Cards Added: 3.4 million, with over 60% of new consumer accounts acquired globally from Millennial and Gen Z consumers.

Card Fee Growth: Up 20% on an FX-adjusted basis, marking the 27th consecutive quarter of double-digit card fee growth.

Net Interest Income: Increased by 11% on an FX-adjusted basis.

Credit Performance: Remained strong, with delinquency and write-off rates below pre-pandemic levels and flat compared to the prior year. Provisions for credit losses decreased to $1.2 billion from $1.3 billion a year ago, reflecting a modest net reserve release.

Dividend: The company increased its quarterly dividend by 17% in Q1.

Outlook: American Express reaffirmed its full-year 2025 guidance for revenue growth of 8-10% and EPS of $15.00-$15.50, citing steady spending and credit trends.

Despite the strong earnings beat, the stock experienced a slight pre-market dip, which some analysts attributed to broader market trends or investor concerns about potential economic uncertainties. However, the overall sentiment from the company and analysts remains positive regarding American Express's resilient business model and premium customer base.

Factors and Metrics Investors Need to Watch for Fiscal Q2 2025 Earnings:

For fiscal Q2 2025, investors will be closely monitoring the following:

Consumer Spending Trends:

Total Card Member Spending Growth: This remains a primary driver of revenue. Investors will look for continued solid growth, particularly in key segments like goods and services, and T&E. Any significant slowdown could signal broader economic weakness impacting discretionary spending.

Travel & Entertainment (T&E) Spending: While Q1 saw strong performance in restaurants and lodging, a sequential slowdown was noted in airline billings. Investors will be watching if this trend continues or if air travel rebounds, as T&E is a crucial part of Amex's premium customer base.

International Spending: Growth in international card services spend (14% YoY in Q1) is a positive sign. Continued strong international performance will be important given the global nature of Amex's business.

Credit Quality and Loan Performance:

Net Write-off Rates and Delinquencies: While credit performance was strong in Q1, investors will watch for any uptick in write-off or delinquency rates. The company's guidance incorporates a potential peak weighted average unemployment rate of around 5.7%, and any deviation from this could impact credit quality.

Provisions for Credit Losses: Changes in loan loss provisions can significantly impact profitability. Investors will assess if the modest net reserve release seen in Q1 continues or if increased economic uncertainty leads to reserve builds.

Revolving Loan Balances: Growth in these balances contributes to net interest income, a key revenue driver.

Card Member Acquisition and Retention:

New Card Acquisitions: American Express's ability to continue attracting new card members, especially within the desirable Millennial and Gen Z demographics, is crucial for long-term growth.

Customer Retention Rates: Given Amex's premium strategy, retaining high-spending, loyal customers is paramount.

Card Fee Growth: Sustained double-digit card fee growth is a testament to the value proposition of Amex's premium products and its ability to refresh and raise fees.

Net Interest Income (NII) and Net Interest Margin (NIM):

NII Growth: Continued growth in net interest income, driven by revolving loan balances and interest rates, will be a significant contributor to overall revenue.

Impact of Interest Rates: The prevailing interest rate environment and its effect on Amex's lending portfolio will be closely scrutinized.

Expense Management:

Customer Engagement Costs: These variable costs are driven by Card Member spending. Investors will assess how well the company manages these expenses in relation to revenue growth.

Operating Expenses and Marketing Expenses: While operating expenses increased in Q1, marketing expenses were roughly flat. The company's ability to control costs while continuing to invest in growth initiatives will be a key focus.

Full-Year Guidance Reaffirmation:

Given the ongoing macroeconomic uncertainties, any revision to the full-year revenue growth (8-10%) or EPS ($15.00-$15.50) guidance would be a significant indicator of management's updated outlook on the economic environment and its impact on the business. Reaffirming guidance would reinforce confidence.

American Express (AXP) Price Target

Based on 25 analysts from Tiger Brokers offering 12 month price targets for American Express in the last 3 months. The average price target is $311.86 with a high forecast of $371.00 and a low forecast of $240.00. The average price target represents a -0.01% change from the last price of $311.90.

Technical Analysis - Exponential Moving Average (EMA)

The bulls is barely defending the 26-EMA level, and the bears would be taking control, if the daily uptrend failed, we could see that despite analysts expecting better performance from AXP, the issues of credit delinquency might be a concern.

So we would need to see how AXP would provide a better than expected earnings in term of its premium customer base, and also the return from its strategic performance.

Else we might see AXP going for a downward movement if any negative outlook or one of the metrics failed to rise up to the expectations.

Key Factors & Metrics to Watch for Q2 2025

Simulated Barbell Sleeve Shifts Under Macro Scenarios

Here we manage to model how AXP’s barbell sleeve (Growth–Yield–Optionality) might rebalance under three macro regimes:

1. Soft Landing (GDP steady, inflation cooling, rates stable)

• Growth Sleeve: ↑ overweight premium card fee growth, international expansion

• Yield Sleeve: ↔ maintain exposure to net interest income and stable loan growth

• Optionality Sleeve: ↑ explore fintech partnerships, stablecoin hedges

2. Stagflation (high inflation, low growth, elevated unemployment)

• Growth Sleeve: ↓ trim discretionary spend exposure (T&E, luxury)

• Yield Sleeve: ↑ overweight resilient fee income, defensive loan segments

• Optionality Sleeve: ↑ stress-test crypto-linked disruption, hedge FX volatility

3. Reflationary Boom (rates rising, consumer strong, inflation moderate)

• Growth Sleeve: ↑ expand premium acquisition, cross-border spend

• Yield Sleeve: ↑ leverage rising net interest margins

• Optionality Sleeve: ↑ deploy capital into digital rails, loyalty tech, AI underwriting

In this section we would be layering in sector rotation overlays and compare AXP’s barbell sleeve dynamics to Visa (V) and Mastercard (MA) across macro regimes:

Sector Rotation Overlay: Financials vs. Tech-Enabled Payments

Barbell Sleeve Comparison: AXP vs. V vs. MA

Macro Regime Simulation: Sleeve Shifts

1. Soft Landing

• AXP: Growth ↑ (Millennial spend), Yield ↔, Optionality ↑ (fintech hedges)

• V/MA: Growth ↑↑ (rails expansion), Yield ↑, Optionality ↑ (AI, tokenization)

2. Stagflation

• AXP: Growth ↓ (T&E drag), Yield ↑ (fee resilience), Optionality ↑ (FX hedges)

• V/MA: Growth ↔, Yield ↑ (volume defensiveness), Optionality ↑ (cross-border arbitrage)

3. Reflationary Boom

• AXP: Growth ↑↑ (premium spend), Yield ↑ (NII tailwinds), Optionality ↑ (digital rails)

• V/MA: Growth ↑↑↑ (global volume), Yield ↑↑, Optionality ↑↑ (real-time rails, embedded finance)

$Visa(V)$ and $MasterCard(MA)$ show stronger growth convexity and margin scalability, while AXP offers credit-linked yield and consumer optionality.

In the following section I would like to share how we simulate AXP’s return cones across macro regimes and overlay fiscal impulse and FX volatility to stress-test sleeve elasticity and convexity.

Return Cone Simulation: AXP Across Macro Regimes

Overlay: Fiscal Impulse & FX Volatility Stress

Fiscal Impulse Scenarios

FX Volatility Scenarios

Strategic Takeaways

AXP’s Growth Sleeve shows strong convexity in reflation but compresses sharply under stagflation + fiscal drag.

Yield Sleeve remains resilient across regimes, especially with fee income and NII tailwinds.

Optionality Sleeve is most sensitive to FX volatility and stablecoin disruption—hedging and fintech exposure become critical.

Here is a conceptual dashboard framework comparing barbell sleeve elasticity for AXP across CPI, VIX, and FX overlays, this is tailored to my multi-factor strategy lens:

AXP Sleeve Elasticity Dashboard: Macro Overlay Comparison

CPI Sensitivity (Inflation Regimes)

VIX Sensitivity (Volatility Regimes)

FX Volatility Sensitivity

Strategic Insights

Growth Sleeve is most elastic to CPI and FX volatility—especially in discretionary and cross-border spend.

Yield Sleeve shows resilience across VIX spikes and FX shocks, anchored by fee income and NII spreads.

Optionality Sleeve is highly convex in low-volatility, expansionary regimes but compresses under stagflation + FX stress.

Summary

Investors will pay close attention to management's commentary on the broader economic landscape, including inflation, consumer confidence, employment trends (especially white-collar unemployment, which impacts Amex's customer base more directly), and any potential impacts from tariffs or other geopolitical factors.

Analysts are generally expecting strong Q2 performance, with consensus EPS forecasts around $3.86 on revenues of approximately $17.69 billion, representing healthy year-over-year increases. The company's focus on its premium customer base, strong credit management, and strategic investments are expected to continue driving performance.

Appreciate if you could share your thoughts in the comment section whether you think AXP would live up to analysts expectation despite the economic challenges posed by the current tariffs and geopolitical factors.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.