American Express Stock's Slide Worsens as Shares Hit $300. Time to Buy?

Core Viewpoint - American Express is experiencing a stock sell-off that appears disconnected from its strong recent financial results, raising questions about whether the decline has been excessive [1]. Financial Performance - In 2025, American Express reported a full-year revenue of $72.2 billion, reflecting a 10% increase year-over-year. Earnings per share (EPS) also rose by 10% to $15.38, or 15% when excluding a prior-year gain from the sale of Accertify [2]. - For Q4 specifically, revenue increased by 10% to $19.0 billion, while EPS grew by 16% to $3.53 [2]. Growth Drivers - Card member spending in Q4 increased by 9%, or 8% on a foreign exchange-adjusted basis. Additionally, net card fee revenue has grown at a double-digit rate for 30 consecutive quarters [3]. Credit Quality - The credit quality of American Express's customer base remains robust, with full-year net write-offs at 2%, unchanged from the previous year. However, Q4 net write-offs increased slightly to 2.1% from 1.9% in the same quarter last year, which is still considered strong for a credit card lender [4]. Market Concerns - Despite the strong performance, there are valid concerns regarding potential disruptions from AI affecting white-collar jobs, which could impact American Express more than other lenders due to its focus on higher spenders. Additionally, worsening geopolitical conditions could negatively affect consumer confidence and spending [5]. Valuation - At approximately $300 per share, American Express trades at about 19.5 times earnings, which is reasonable given its strong outlook. The stock trades at around 16.8 to 17.3 times management's 2026 earnings guidance of $17.30 to $17.90 per share [6]. - Management projects revenue growth of 9% to 10% and EPS growth of approximately 12% to 16% for 2026. If these targets are met while maintaining credit quality, the stock does not appear overpriced at its current valuation [7].