American Express discloses loan portfolio statistics

American Express (AXP) reported its May 2025 delinquency and write-off rates for U.S. Consumer (1.3% and 2.1%, respectively) and U.S. Small Business Card Member loans (1.5% and 2.4%, respectively). The company also announced the reclassification of $1.6 billion in Amazon small business cobrand loans to held-for-sale, effective June 1, which will exclude them from future investment loan reports. Redburn-Atlantic upgraded AXP to Neutral, while reducing the price target to $255, citing concerns over revenue growth targets.

Analysis

American Express Co. (AXP) reported key credit performance metrics for its U.S. Consumer and U.S. Small Business Card Member loan portfolios for the month ending May 31, 2025. U.S. Consumer Card Member loans totaled $92.0 billion, with a 30 days past due rate of 1.3% and a net write-off rate of 2.1%. U.S. Small Business Card Member loans stood at $32.0 billion, exhibiting a 30 days past due rate of 1.5% and a net write-off rate of 2.4%. Concurrently, AXP announced the reclassification of approximately $1.6 billion in Card Member loans from its Amazon small business cobrand portfolio to 'loans held for sale', effective June 1, 2025; these loans will subsequently be excluded from investment loan reports. This reclassification will affect the comparability of future loan portfolio data. The company maintains a solid financial position, evidenced by a current ratio of 1.57, last-twelve-months (LTM) revenue of $62.05 billion, and LTM net income of $10.14 billion. Recent corporate activities include significant planned updates to its U.S. Consumer and Business Platinum Cards, representing a substantial investment in card benefits, and capital management actions such as the issuance of €1 billion in notes due 2032 and an additional $5 billion in new notes with varying maturities. From an analyst perspective, Redburn-Atlantic upgraded AXP stock to Neutral from Sell, though it reduced the price target to $255, citing concerns regarding the company's ability to achieve its revenue growth targets. InvestingPro analysis suggests the stock is trading near its Fair Value. These disclosures provide insight into AXP's credit risk and operational strategy, though the company notes that Lending Trust credit performance can vary due to factors like loan mix and aging.

Key Decisions for Investors

• Investors should closely monitor upcoming delinquency and net write-off rate trends, particularly noting the impact of the $1.6 billion Amazon cobrand loan portfolio reclassification starting from June 2025 reports.
• Carefully assess the potential impact of American Express's significant investment in Platinum Card refreshes and recent debt issuances on near-term expenses, future revenue generation, and overall capital structure.
• Consider the mixed signals from Redburn-Atlantic's upgrade to Neutral juxtaposed with a reduced price target and revenue growth concerns, alongside the stock trading near its assessed Fair Value, suggesting a balanced risk-reward profile requiring careful evaluation of ongoing performance against targets.