American Express (AXP) Continues to Build a Wider Moat than the Market Realizes

American Express (AXP) is building a wider moat than the market realizes. The recent pullback has only made the setup more interesting. The company continues to build on what already makes it strong, including its brand, premium customer base, new partnerships, and international growth. Spending from its core customers has also held up better than many investors expected. While the stock remains weighed down by macro worries, the business looks solid and continues to improve. That disconnect is why I still think AXP has upside.

American Express’ Gridiron Moat around NFL Spending

American Express’s recent deal with the National Football League (NFL) may look like just another sponsorship. However, I think it signals a bigger shift. Amex is now the official payments partner of the NFL. That’s a direct attack on consumer spending over the next 40 years. We are looking at a seven-year, nearly billion-dollar strategic alignment that effectively builds a “Gridiron Moat” around the most coveted demographic in finance.

For the first time, Millennials and Gen Z aren’t just the “future” of American Express. They are, in fact, the current engine, now representing the largest share of consumer spending on the network. By securing exclusive ticket presales and “Card Member-only” lounges at every major NFL event from the Super Bowl to the London and Melbourne games, Amex has turned its credit cards into backstage passes.

It’s smart branding on Amex’s part. The Green and Platinum cards no longer come across as basic credit cards. They feel more like status products tied to access and a certain kind of lifestyle. That also matters because Amex’s customer base tends to respond positively to things that feel a little more exclusive, and I think that can help both spending and broader interest in the cards.

The Membership Lifestyle Engine

However, the story goes well beyond the stadium gates. The more meaningful story, in my view, is how Amex has embedded itself in affluent consumers’ day-to-day lives over the last year. It is now playing a much broader role than simply processing payments. Between the Platinum overhaul and the rapid expansion of Resy, Amex has built an ecosystem that feeds on itself and gets stronger with scale. That is the kind of advantage JPMorgan Chase (JPM) and Citi (C) cannot quickly replicate.

The rather significant pivot we are seeing toward international markets also seems to be underestimated by Wall Street. In the first few months of the year, Amex’s international billed business has demonstrated remarkable resilience, particularly in high-growth corridors like Mexico and Japan. Notably, card member loans saw an above-average bump last quarter, and I believe international markets will sustain this trend.

Again, this is at least partly the result of a deliberate strategy to export the “American Express Lifestyle” to a rising global middle class that values prestige as much as it does points. When you blend this with the upcoming “NFL Extra Points” card launch later this year, you’re looking at a product pipeline that is set to keep the top-line growing at a high single-digit clip regardless of what the Fed decides to do with interest rates next month.

The Arithmetic of Pessimism

Now, the stock is currently trading about 20%–25% below its 52-week high, dragged down by a general market sell-off and some frankly overblown fears about credit card interest rate caps. Yet the math doesn’t support the current pessimism. AXP is trading at roughly 17x expected 2026 earnings per share (EPS) of $17.59, which feels like a modest multiple given the quality of the underlying business.

The consensus expects the company to grow its earnings by around 15% per annum on average over the next three years. In what world does a high-moat, compound-growth machine like this trade at a multiple that barely matches its growth rate? The “network effect” here is self-reinforcing, as more premium merchants attract more high-spending cardholders, which in turn attracts more merchants. This creates a customer base that is uniquely resilient to downturns.

While other lenders might worry about subprime defaults during a downturn, Amex is looking at a stack of affluent users who treat their card fees as a utility bill. It’s the last thing they’d ever cancel. I believe a fair valuation for a business of this caliber is closer to 20x EPS. So at today’s level, I believe you’re getting a great company along with a wide margin of safety and a somewhat clear path to double-digit returns.

Is AXP Stock a Buy, Sell, or Hold?

Following the stock’s recent pullback, American Express still has a Moderate Buy consensus rating on Wall Street, based on eight Buy, 10 Hold, and just one Sell ratings. In addition, AXP’s average price target of $361.19 implies roughly 19% upside potential over the next 12 months.

Conclusion

AXP remains a great long-term investment. It’s an investment you hold, not one you trade. The brand should prove more than useful, especially in this kind of environment. Amex has more room than most companies to keep customers engaged and protect pricing. The NFL partnership helps, management has an exceptional track record, and the stock still looks cheap. That is more than enough for me to stay positive on it.