Dray
Finance Student, Stock Investor, Technology & Business
American Express's continued growth makes its lower forward multiple than Mastercard and Visa a very attractive long-term opportunity. It trades at 16.7x forward earnings against more than 26x for each peer. All three sold off earlier this year, but Mastercard and Visa reached new highs while American Express remains down 15.6% year to date. x.comÂ
American Express is an opportunity because macro pressure has pushed the shares down nearly 20% this year, below $300, even as the business keeps growing. Revenue is up 10% and EPS 11% year over year, card member spending is growing 9%, and the stock trades at about 16x forward earnings. It also raised its dividend 16% to $0.95 a share earlier this year. x.comÂ
American Express's credit risk keeps its multiple below Visa's or Mastercard's, but that persistently low valuation lets management retire shares steadily. At 16x forward earnings it is not especially cheap by its own history; 28% of shares were retired over ten years. Buying here looks more like owning a steady cash-returning compounder than expecting extraordinary returns. x.comÂ
American Express's solid earnings growth makes it worth continuing to buy and hold for years. Q3 revenue rose 9%, net income 28% and adjusted EPS 13%; American Express also raised its full-year EPS guidance. x.comÂ
AI agents will erode credit card banks' pricing power. Since the GFC, uncompetitive card issuers have raised rates disproportionately in hiking cycles and barely cut them in easing cycles. Agents will let uninformed consumers refinance at much lower rates and make card points costlier as consumers optimize rewards. Medium term, that is net negative for JPMorgan, Citigroup, Capital One, American Express and Bank of America, and net positive for unsecured personal lenders such as SoFi and Upstart. … Show more
Growing card spending and raised adjusted EPS guidance strengthen American Express's earnings outlook. Billed business rose 8% and adjusted EPS rose 13%; the new $17.60-$17.90 full-year adjusted EPS range implies 14-16% growth. The 31% GAAP EPS rise was helped by one-time tax benefits, while lower credit provisions partly reflect a reserve release despite higher write-offs. x.com x.comÂ
American Express looks set for a laggard catch-up trade: it sits near a bear market while Mastercard and Visa are at all-time highs, despite historically tracking them on weekly and especially monthly bases. It is Berkshire Hathaway's second-biggest holding after Apple. The setup resembles Ferrari, a high-end consumer name that stalled and then turned around out of nowhere. x.comÂ
Mastercard's payment and earnings growth make it more satisfying than ever to own amid Alphabet's and Amazon's post-earnings reactions. Q3 2026 revenue rose 14% to $9.8 billion, adjusted EPS rose 21% to $5.31, and adjusted operating margin was 60.5%. Volume grew 7%, cross-border volume 11%, and $3.8 billion went to shareholders through buybacks and dividends. x.comÂ
Visa's roughly 30x earnings multiple and $750 billion valuation leave less upside than other opportunities, even if it keeps executing; the best case may be another doubling over a few years. Its once-impenetrable moat may look different in five years, while its reputation as a safe compounder is already priced in. This is a relative judgment, not a prediction that Visa cannot keep rising. x.com x.com x.com x.com x.comÂ
Visa and Mastercard look like attractive, safe cash machines at decade-low valuations, likely compounding 10-15% a year from here. Mastercard trades at 23x forward earnings, its lowest in a decade, and Visa at 22x; Mastercard just bounced off its 200-week moving average, untouched since 2022. They will not 10x in ten years but should protect the downside. Visa is slightly preferred for its sheer size, though Mastercard grows faster. x.comÂ
American Express is the kind of company every investor wants, with dividends per share rising as its share count shrinks. A list of high-quality compounders puts it at 18x earnings with a 3.8% shareholder yield, buying back about 2.5% of its shares a year. x.comÂ
Credit-card stocks American Express, Visa and Mastercard are among the best values in the current market. American Express's latest earnings look pretty good, and the charts show plenty of upside potential. x.comÂ
