American Express (AXP) is set to report its second-quarter 2025 earnings on July 18. Interestingly, analysts forecast earnings per share of $3.89, compared to $4.15 EPS during the same period last year. However, revenue is expected to increase year-over-year to around $17.7 billion. When taking a deeper look at spending patterns, much of AXP’s growth is being fueled by younger consumers. Indeed, Millennials and Gen Z now account for over 60% of new accounts and roughly 35% of total spending on American Express cards, which stood at almost $440 billion in the previous quarter, as pictured below.
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In addition, these groups are spending more in categories like restaurants, lodging, and air travel, even as the broader economy slows down. They also typically have credit scores of around 750, as well as lower rates of missed payments compared to industry averages. This helps American Express keep credit losses low and maintain a healthy balance sheet, which are key advantages.
Looking ahead to the earnings report, investors should focus on a few key areas. The first is to determine if the company is maintaining momentum in key spending categories, such as travel and dining. The second question is whether credit losses are remaining low or starting to increase. Lastly, and likely the most important when it comes to share price, will be to see if management reaffirms its full-year outlook. So far, American Express has kept its 2025 guidance unchanged, with 8-10% revenue growth and EPS of $15.00 to $15.50.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a 3.7% move in either direction.
Is AXP Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AXP stock based on seven Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AXP price target of $319.76 per share implies that shares are near fair value. At the same time, TipRanks’ AI Stock Analyst has an Outperform rating and a $366 per share price target.
