Is American Express a Buy Ahead of Its Platinum Card Refresh?

American Express (AXP) reported strong Q2 2025 results, with revenue up 9% and adjusted EPS up 17%, and reaffirmed its full-year 2025 guidance, driven by robust double-digit growth in high-margin card fee revenue and record cardmember spending. The company maintains best-in-class credit performance, and the imminent Platinum card refresh is expected to further boost engagement and fee growth. Trading at approximately 21 times its 2025 earnings guidance, AXP presents an attractive valuation for a premium payments platform with clear growth catalysts.

Analysis

American Express is demonstrating robust fundamental strength, underscored by its second-quarter 2025 results which featured a 9% year-over-year revenue increase to a record $17.9 billion and a 17% rise in adjusted earnings per share. This performance prompted management to reaffirm its full-year 2025 guidance for 8% to 10% revenue growth and EPS between $15.00 and $15.50. The growth is broad-based but notably driven by a strategic shift towards higher-margin revenue streams; net card fees surged 20% year-over-year, compounding at approximately 17% annually since 2019. This is supplemented by a 6% increase in discount revenue and a 12% rise in net interest income. Critically, this top-line momentum is supported by best-in-class credit quality, with net write-offs holding stable near 2-2.4% and low past-due rates. The upcoming refresh of its flagship Platinum card represents a significant near-term catalyst, with a proven playbook for boosting engagement and accelerating fee revenue. At a valuation of approximately 21 times the midpoint of 2025 earnings guidance, the stock appears reasonably priced given its consistent execution, premium brand positioning, and clear growth levers.

Key Decisions for Investors

• Given the reaffirmed guidance, strong momentum in high-margin card fee revenue, and stable credit metrics, the current valuation of approximately 21 times forward earnings presents a potentially attractive entry point for long-term investors.
• The upcoming Platinum card refresh is a key catalyst; investors should monitor post-launch customer acquisition and engagement data, as a successful rollout could accelerate the trajectory of fee income growth.
• While credit performance is currently best-in-class, it is prudent to monitor macroeconomic indicators, as a significant downturn could temper the record consumer spending that is crucial to AXP's revenue model.
• Consider the company's consistent double-digit growth in subscription-like card fees as a durable revenue stream that differentiates it from other payment networks and traditional lenders.