Abstract
American Express will report fourth-quarter results on January 30, 2026 Pre-Market; investors will focus on revenue growth near 10.27%, margin resilience, and whether card spend and net interest income can sustain double-digit earnings momentum.Market Forecast
Consensus for the current quarter points to total revenue of 18.92 billion, up 10.27% year over year, with EBIT estimated at 4.66 billion and adjusted EPS at 3.54, implying year-over-year growth of 16.45%. The market expects gross profit margin to remain broadly stable, while net profit margin trends are seen holding near recent levels as credit metrics normalize from cyclical lows. American Express’s consumer and commercial card businesses are expected to deliver steady billed business growth with continued strength in fee income and resilient spend; international momentum is expected to complement U.S. performance. The most promising segment appears to be U.S. Consumer Services, underpinned by premium card fee growth and travel-related spend; last quarter it generated 8.86 billion with solid year-over-year gains.Last Quarter Review
In the prior quarter, American Express delivered revenue of 18.43 billion, a gross profit margin of 64.50%, GAAP net income attributable to shareholders of 2.90 billion, a net profit margin of 16.93%, and adjusted EPS of 4.14, with year-over-year growth in both revenue and earnings. A key highlight was consistent double-digit revenue growth outpacing expense growth, aided by fee-based income and interest yield expansion, keeping margins healthy even as credit costs edged toward normalized levels. Main business highlights included U.S. Consumer Services revenue of 8.86 billion, Commercial Services revenue of 4.28 billion, International Card Services revenue of 3.34 billion, and Global Merchant and Network Services revenue of 1.97 billion, with U.S. Consumer Services the largest contributor by absolute dollars and share.Current Quarter Outlook (with major analytical insights)
Core Card Earnings Engine
American Express’s core card franchise hinges on billed business growth, net interest income trajectory, and fee revenue durability. For this quarter, consensus anticipates revenue to increase to 18.92 billion, while adjusted EPS is projected at 3.54, suggesting operating leverage despite the seasonal step-down after the holiday spend peak. The key swing factor within the core is the balance between growth investments in customer acquisition and marketing and expense discipline; last quarter’s operating efficiency provides a buffer that can help sustain margins if loan loss provisions tick up. Credit normalization is expected to continue, yet delinquency and net write-off trends remain below long-run averages for the premium skew of the portfolio, which supports a stable net profit margin near the high teens.Within net interest income, rate dynamics have begun to stabilize as the policy outlook shifts toward potential easing in 2026, but the lagged benefit of higher revolving balances should continue to support yields. Fee revenues, anchored by premium annual fees and co-brand partnerships, remain a resilient line as renewal rates hold high and travel/services spending remains steady. The combination of these drivers positions the core business to deliver mid-to-high single-digit sequential EBIT even with seasonally lower spend days, subject to cardmember spending patterns in travel and dining holding up through January.
U.S. Consumer Services Momentum
The U.S. Consumer Services segment stands out as the most promising driver given its scale and the stickiness of premium card relationships. Last quarter’s 8.86 billion in revenue underscores the segment’s contribution, with robust new card acquisitions and stable renewal rates underpinning fee income. This quarter, continued growth in billed business among premium cohorts, combined with elevated travel demand around the holiday season flowing into early January statements, should support revenue resilience.Marketing reinvestment remains a watch point; American Express has leaned into customer acquisition where lifetime value economics clear its hurdle rates, which can modestly pressure near-term margins. However, improved engagement on travel platforms and merchant offers enhances spend per account, offsetting part of the investment. Credit performance within U.S. Consumer remains comparatively solid, aided by affluent customer exposure, which limits the impact of normalization on the net profit margin. If credit normalization remains orderly, segment-level operating leverage can persist, supporting consolidated EPS near the consensus mark of 3.54.
Commercial and International Diversification
Commercial Services and International Card Services provide diversification and incremental growth levers. Commercial Services revenue of 4.28 billion last quarter benefited from steady small and mid-sized business spend, especially in travel, T&E, and digital advertising categories. For the current quarter, expectations lean toward continued resilience, though corporate travel and discretionary marketing outlays may show typical year-end budget seasonality. International Card Services at 3.34 billion last quarter continues to recover, aided by cross-border travel and network acceptance gains; exchange rate effects appear manageable and less volatile quarter to quarter compared with 2022–2023 levels.These segments also contribute to merchant network economics as acceptance broadens globally, helping Global Merchant and Network Services, which posted 1.97 billion last quarter. The merchant mix shift toward services and travel categories supports stable take rates, even as large enterprise merchant pricing stays competitive. Taken together, the breadth of spend categories and geographies limits concentration risk and supports a steadier revenue base into the first quarter seasonality.
Margin Trajectory and Credit Normalization
Gross margin at 64.50% last quarter reflects the premium interchange, fee, and interest mix; for the current quarter, margins are expected to hold broadly stable, supported by pricing discipline and a favorable mix of fee and interest revenues. The net profit margin near 16.93% last quarter provides a reference point, and investors will monitor the interplay between provision build, funding costs, and operating expense growth. With consensus revenue growth at 10.27% and EPS growth at 16.45%, there is an implied improvement in operating leverage, assuming provisions rise in line with receivables and not disproportionately.Provisions remain a variable as vintage seasoning and consumer delinquencies trend toward pre-pandemic norms. American Express’s affluent exposure, conservative underwriting, and rewards structure have historically mitigated sharp credit swings, which could help keep net write-offs contained relative to general-purpose peers. If credit metrics come in better than modeled, EPS upside could emerge; conversely, a faster normalization would likely cap margin expansion and keep EPS near consensus.
Stock Price Sensitivities for This Quarter
The stock’s near-term reaction will be most sensitive to three items: revenue growth sustainability, credit outcomes, and expense discipline. A print near 18.92 billion in revenue with solid billed business cadence would validate the growth thesis and support the premium multiple. Any upside or downside surprise on credit metrics—delinquency and net write-offs—will likely drive multiple expansion or contraction, respectively, given their direct link to EPS durability. Operating expense growth versus revenue growth will also be scrutinized; investors typically reward operating leverage, especially if marketing and customer engagement spend are productive with clear lifetime value paybacks.On guidance, commentary around 2026 growth algorithms for revenue and EPS, as well as capital return cadence, could influence sentiment. If management reiterates a path to double-digit revenue growth with stable returns and Buyback continuity, the market bias would remain constructive. Conversely, signals of heavier reinvestment or faster credit normalization could temper enthusiasm despite solid top-line trends.