American Express: Attractive Risk-Reward, Solid Growth Outlook, and Valuation Upside Support Buy Rating

William Blair analyst Christopher Kennedy has reiterated their bullish stance on AXP stock, giving a Buy rating on January 16.

Christopher Kennedy has given his Buy rating due to a combination of factors that highlight American Express’s attractive risk-reward profile. He emphasizes that the company’s earnings and core operating trends in the December quarter were solid, with EPS modestly exceeding expectations and key metrics holding steady. He also notes that management’s initial 2026 outlook, calling for high-single- to low-double-digit revenue growth and low- to midteens EPS growth, is broadly in line with or slightly better than the Street. In his view, the current valuation—trading at a discount to the S&P 500 despite stronger projected growth, robust returns on equity, and industry-leading credit performance—creates an opportunity for investors to add to positions.

Kennedy further points to American Express’s ability to support its long-term growth algorithm even while undertaking significant spending, such as the investment associated with the platinum card refresh. The company’s substantial annual budget for marketing and investments provides flexibility to reallocate funds as needed to protect profitability and growth. While new U.S. card acquisitions slowed modestly in the latest quarter, he highlights the durability of the long-tenured baby boomer base and the strong engagement of younger generations, including rapid growth in Gen Z and millennial spending. He also sees room for improvement and potential re-acceleration in the small and midsize enterprise segment over time, especially given historical growth rates and recent strategic moves like the Center acquisition.

In another report released on January 16, TipRanks – Anthropic also reiterated a Buy rating on the stock with a $401.00 price target.