American Express Co. (NYSE: AXP) shares remain down roughly 12% for 2026, despite a strong third-quarter earnings report and a higher profit outlook. The stock rose about 0.6% in premarket trading on Friday, October 23, after adjusted earnings beat estimates. Earlier weakness reflects investor concerns about rising customer-acquisition costs, competition for premium cardholders and whether revenue growth can translate into stronger profits.
American Express reported third-quarter revenue of $20.06 billion, up 8.9% from a year earlier, while adjusted earnings rose to $4.68 per share from $4.14. The results narrowly missed Wall Street’s $20.12 billion revenue estimate but exceeded expectations for adjusted earnings of around $4.50. The Bloomberg earnings report highlighted the company’s improved profit outlook, although the share-price recovery has done little to erase its losses for the year.
The distinction is important for investors assessing the current decline. AmEx was not extending its losses in Friday’s premarket session. Instead, the market has been reassessing the stock after a difficult year in which persistent inflation, higher borrowing costs and concerns about expenses weighed on its valuation. Barron’s reported that shares remained about 12% lower for the year as of Thursday, October 22.
Why American Express Stock Has Been Under Pressure
The first concern is how much American Express must spend to keep attracting wealthy customers. Its premium-card business relies on rewards, travel benefits and other perks to encourage customers to spend more on its network. Competitors are offering their own premium products, pushing card issuers to spend more on acquiring and retaining high-value customers.
The pressure was visible in the second quarter. AmEx’s expenses rose 12% year over year to $14.48 billion as customer rewards, cardmember services, marketing and other operating costs increased. The company has been investing in younger customers, particularly Gen Z and millennials, to build longer-term relationships. Those investments could support growth, but they also make it harder to translate every additional dollar of revenue into profit.
This is especially relevant when spending is strong but the cost of generating that spending also rises. American Express reported that its cardmember billed business increased 8% year over year to $454 billion in the third quarter. However, the total was slightly below the $455.8 billion reported in the second quarter. The latest figure still indicates growth, but it shows that the pace of card spending did not accelerate sequentially.
The company’s strategy depends on maintaining that spending momentum while continuing to expand its merchant network. Its cards are now accepted at more than 190 million merchant locations worldwide, giving cardmembers more opportunities to use them for travel, dining and everyday purchases. The challenge is to turn wider acceptance and customer loyalty into profitable growth without letting rewards and marketing costs absorb too much of the benefit.
Broader economic concerns have also weighed on AXP stock. Investors have been watching inflation, interest rates and consumer confidence for evidence that households may begin cutting back on discretionary purchases. American Express has a relatively affluent customer base, which can provide some protection during periods of economic uncertainty, but its business is still exposed to spending on restaurants, travel and shopping.
Recent weakness in US consumer sentiment has reinforced those concerns. The company’s results show that affluent consumers continue to spend, but that does not guarantee the same level of demand will persist if inflation and financing costs remain elevated.
Valuation has added to the pressure. Before its latest results, AmEx shares had struggled to regain their previous highs, leaving investors more sensitive to signs that growth might slow or expenses could rise faster than expected. Even when earnings beat estimates, a stock can remain under pressure if the market believes the result does not justify its earlier valuation.
The company is also competing in a crowded premium-payments market. Visa (NYSE: V) and Mastercard (NYSE: MA) operate broader payment networks, while banks and other card issuers compete with their own rewards programs. American Express benefits from its integrated card, merchant and lending model, but it must keep spending on customer benefits and partnerships to maintain its position.
What the Latest Earnings Mean for AXP Stock
American Express’s third-quarter results offer several reasons not to interpret its year-to-date decline as evidence of a deteriorating business. Net income rose to $3.71 billion from $2.9 billion a year earlier. Adjusted earnings of $4.68 per share exceeded analyst expectations, and provisions for credit losses fell to $1 billion from $1.3 billion in the prior-year quarter.
Those lower provisions suggest the company’s near-term outlook for credit losses has improved. Strong card spending and continued demand among affluent customers also provide support for its business model. However, the latest earnings did not fully resolve the market’s concerns about expenses and the pace of growth.
Management raised its full-year 2026 earnings outlook. It now expects GAAP earnings of $18.30 to $18.60 per share, up from its previous range of $17.30 to $17.90. The GAAP forecast includes the benefit of a gain from the sale of its investment in Global Business Travel Group, partly offset by a restructuring charge. On an adjusted basis, AmEx now expects earnings of $17.60 to $17.90 per share, lifting the lower end of its previous $17.30 to $17.90 range. The company maintained its forecast for 10% annual revenue growth, as The Wall Street Journal reported.
The guidance change is positive, but it is not a wholesale upgrade to every part of the outlook. The upper end of the adjusted earnings range remains unchanged, while the revenue-growth target was maintained. Investors will want evidence that higher sales and card fees can continue to support earnings after accounting for rewards, marketing and operating costs.
The distinction between reported and adjusted earnings also matters. A one-time gain can lift GAAP results without creating the same recurring income as spending on cards, interest income and membership fees. Investors will therefore be looking at the company’s underlying earnings and cash generation as well as its headline profit forecast.
American Express remains a major holding for some long-term investors. It was the second-largest publicly disclosed equity position in Berkshire Hathaway’s June 2026 stock portfolio, behind Apple. That does not guarantee future share-price performance, but it reflects the company’s importance as a financial-services business with a durable customer base and a substantial payments network.
Market sentiment toward financial stocks may also be affected by broader earnings results. Investors are assessing the latest corporate earnings reports for signs that consumers remain resilient while businesses manage higher costs. AmEx’s premium customers continue to spend, but the company still needs to show that its investment in rewards, technology and customer acquisition can generate attractive returns.
For AXP shareholders, the central question is whether American Express can sustain revenue growth while controlling the costs of competing for premium customers. The latest results provide evidence of a healthy business and a stronger profit outlook, but the narrow revenue miss and unchanged revenue-growth target leave room for caution.
The year-to-date decline therefore reflects a combination of valuation pressure, concern about customer-related expenses and uncertainty over the consumer outlook—not a clear collapse in card spending. Friday’s premarket rise suggests investors welcomed the earnings report, but a more durable recovery will depend on American Express demonstrating that its revenue growth can translate into sustained earnings gains.