1 Top Warren Buffett Stock Trading 21% Below Its All-Time High That Can Double a $1,000 Investment in 5 Years

American Express trades at 18.6x earnings, 23% below its multiple at the start of 2026 and 21% below its December 2025 all-time high. The article argues that a rerating to 20x combined with management's long-term mid-teens EPS growth target could roughly double the stock over five years, turning $1,000 into about $2,000 by late 2031. Berkshire Hathaway remains a major shareholder, owning 22.5% of American Express shares valued at $46.3 billion.

Analysis

AXP’s rerating case depends less on a modest headline P/E change than on proving that its premium-card ecosystem can sustain spend growth without buying it through elevated rewards, marketing, or credit-loss expense. The key competitive pressure is from JPM, Capital One, and premium Visa/Mastercard issuers: if retention requires richer benefits, AXP’s discount-rate and net-card-fee growth can remain healthy while incremental margins disappoint. Conversely, stable expense-to-revenue leverage would justify a higher-quality payments multiple rather than a lender multiple.

Near term (days to weeks), this is unlikely to create a standalone catalyst; the article adds no new fundamental evidence beyond management’s existing long-term aspiration. Over the next 1-3 months, monthly billed-business trends, delinquency/vintage commentary, and any change in marketing intensity matter more than valuation narratives. A consumer slowdown would hit AXP disproportionately through both transaction volumes and provisions, while its affluent customer base may delay—but not eliminate—that downside.

The non-obvious structural issue is Berkshire’s large ownership: it supports a stable shareholder base and amplifies the per-share impact of AXP buybacks, but also limits the pool of natural incremental institutional buyers. The bullish thesis is therefore underwritten by durable EPS compounding and capital return, not a scarcity premium. AXP needs to demonstrate that growth is funded internally at attractive returns; otherwise, the market is likely to cap the multiple closer to bank/consumer-credit peers despite its network economics.

Key Decisions for Investors

• Maintain a neutral-to-modest long AXP only on confirmation of accelerating billed business with stable credit metrics at the next earnings update; target a 6-12 month holding period. Add only if management reiterates EPS-growth targets while marketing and rewards costs grow slower than revenue; exit on a material provision build or downward revenue-growth revision.
• Prefer a quality-payments pair trade: long AXP / short DFS or COF over 3-6 months if premium spend remains resilient and AXP’s delinquency trend stays contained. The trade isolates AXP’s closed-loop network and affluent-cardholder advantage from broad consumer-credit beta; cover if AXP’s loss-rate trend converges upward or competitors gain share through rewards escalation.
• Do not position for a multiple expansion solely from the published valuation argument. Set an alert around earnings for net card-fee growth, discount-revenue yield, provision trends, and marketing/rewards expense; absent evidence of operating leverage, treat any sharp pre-earnings rally as an opportunity to trim rather than chase.
• For BRK.A holders, view AXP strength as incremental rather than thesis-changing: the mark-to-market benefit is unlikely to drive Berkshire’s valuation independently. The relevant watch item is whether AXP repurchases continue to shrink float, increasing Berkshire’s effective ownership without requiring additional capital deployment.