How To Trade American Express Stock Ahead Of Earnings?

American Express (AXP) is slated to announce Q3 2025 earnings on October 17, 2025, with consensus estimates projecting revenues of $18 billion, an 8.5% year-over-year increase, and EPS of $3.28, up 6.5%. This growth is expected to be driven by increased cardholder spending, higher net card fees from premium product penetration and strong retention, and international segment performance. Historically, AXP has seen positive one-day post-earnings returns in about 35% of cases over the past five years, with a median positive move of 6.2% versus a median negative move of -2.7%, suggesting a volatile immediate market reaction to its results.

Analysis

American Express (AXP) is scheduled to announce its Q3 2025 earnings on October 17, with consensus estimates projecting revenues of $18 billion, an 8.5% year-over-year increase, and EPS of $3.28, representing a 6.5% rise. This anticipated growth is primarily driven by increased cardholder spending, a rise in net card fees from greater premium product penetration, robust retention rates, and strong performance in the international segment due to higher merchant acceptance. The company's current market capitalization stands at $229 billion, with LTM revenue of $69 billion and net income of approximately $10 billion.

Despite the positive fundamental outlook, AXP's historical post-earnings stock performance indicates significant immediate volatility. Over the past five years, positive one-day (1D) post-earnings returns occurred only 35% of the time across 20 data points, dropping to 25% when examining the last three years. The median positive 1D return was 6.2%, while the median negative return was -2.7%, suggesting an asymmetric risk profile around earnings announcements.

This historical pattern implies that while the potential for a positive move exists, the probability of an immediate negative reaction is higher, albeit typically of a smaller magnitude. Event-driven strategies focused solely on a positive post-earnings price pop face challenging odds. Investors should therefore consider the company's strong fundamental drivers in conjunction with its demonstrated short-term market reaction tendencies.

Key Decisions for Investors

• Investors should closely monitor the Q3 2025 earnings report for confirmation of the projected revenue and EPS growth, paying particular attention to cardholder spending trends, premium product penetration, and international segment performance.
• Given the historical 35% probability of positive one-day post-earnings returns over five years (25% over three years) and the asymmetric median returns (+6.2% vs. -2.7%), investors should factor in significant immediate price volatility and a higher likelihood of negative short-term reactions.
• Consider a strategy that balances AXP's strong fundamental growth drivers with the historical tendency for immediate post-earnings price uncertainty, potentially favoring longer-term positions over short-term event-driven trades.