AmEx expects optimistic earnings for 2026 as rich spending continues; stock dip

American Express on Friday forecast full-year profit well above Wall Street expectations, underscoring the resilient spending of its young and affluent customers, but a small earnings miss during the holiday quarter weighed on its shares.The results revealed divergent spending patterns, with many U.S. consumers cutting back under the weight of high borrowing costs and still-high inflation, while higher-income households continued to spend on travel, dining and luxury.

“We do not foresee any discontinuity,” AmEx CFO Christophe Le Caillec told Reuters. “Gen Z and Millennials’ spending on their American Express cards now exceeds that of Gen X,” he said.Le Caillec said this was a first for its US consumer business and reflected the company’s longstanding efforts to build a younger and premium customer base.

The company expects 2026 earnings per share between $17.30 and $17.90. The midpoint of the range is above the average analyst projection of $17.41 per share, according to LSEG estimates.

AmEx’s earnings came in at $3.53 per share in the three months ended Dec. 31, slightly below estimates of $3.54. Citigroup analysts attributed the narrow loss to higher costs, which rose 10% to $14.5 billion in the final three months of 2025.

The company’s shares last fell about 2% in morning trading in a weak broader market. “If there’s a problem, it might be that the fourth quarter clearly shows platinum renewal costs but no corresponding increase in new accounts,” analysts at Truist wrote in a note.

Last year, AmEx unveiled long-awaited upgrades to its ‍U.S. Platinum cards with new benefits.

The credit card giant’s shares were up 24.7% through 2025, outperforming rivals Visa’s 11% and Mastercard’s 8.4%.

SPENDING IS MAINTAINING

Billed revenue, a measure of spending on AmEx cards, rose 9% to $445.1 billion in the fourth quarter.

Le Caillec pointed to a strong holiday shopping season, driven by growth in the restaurant, travel, retail and luxury categories.

Revenue rose 10% to $18.98 billion, beating expectations of $18.92 billion. It predicts sales will grow between 9% and 10% in 2026, while expectations are around 9%.

Investor attention is turning to how AmEx will handle a potential one-year cap on credit card interest rates of 10%, proposed by US President Donald Trump, to address affordability concerns.

“We agree on the focus on affordability, just like everyone else, we just don’t think the proposed limit would achieve that goal,” Le Caillec said.