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American Express Posts Record Earnings in 2026, Yet the Stock Is Down 15%
By Bear Creek Staff, . Bear Creek Capital Network.
American Express delivered strong third-quarter 2026 results on October 23, raising its full-year earnings guidance to a range of $18.30 to $18.60 per share on a reported basis, or $17.60 to $17.90 adjusted, according to The Motley Fool. The midpoint of the adjusted range represents a roughly 15.4% increase over 2025. The company also guided for revenue growth of 9% to 10% for the full year.
Despite those results, the stock has fallen sharply. The Motley Fool puts the year-to-date decline at 15.3% as of late October, which would be the worst annual drop since 2015. Nasdaq.com put the figure closer to 12% at the time of its report. CNBC cited a decline of roughly 17%, attributing it to concerns over rising operating costs and fears about macroeconomic and geopolitical conditions. The three figures reflect different measurement dates rather than a factual dispute, but the direction is consistent across all three outlets.
Why the stock is lagging its own results
The Motley Fool identifies four pressures weighing on the share price. The first is valuation: over the past decade, the stock delivered a total return of 452.8%, against 322.1% for the S&P 500, while earnings nearly tripled. In the three years through late 2025, the stock gained 137.6% while earnings rose 47%. That gap between price appreciation and earnings growth left the stock exposed to a correction even before any operational concerns emerged.
The second pressure is margin erosion. Third-quarter figures showed card member reward expenses up 10% from a year earlier, business development spending up 11%, and card member services costs up 36%. The company is spending heavily to keep cardholders engaged, and if spending volumes soften, that cost base becomes harder to justify.
Third, there is a macro concern specific to American Express's customer profile. Its cardholders are generally affluent, and their spending has held up, partly because employment remains strong and asset prices, including real estate and equities, have stayed elevated. If either of those supports weakens, the spending picture could shift.
The fourth factor, implied by the valuation discussion, is that a stock trading at a premium multiple after years of outperformance has less room for error. Any hint of slowing growth or margin pressure gets priced in quickly.
What analysts are saying
BMO Capital Markets initiated coverage of American Express with a bullish view, according to CNBC, arguing the company is positioned to benefit from continued demand for premium credit cards. BMO set a price target of $380, which at the time of the report implied roughly 24% upside from where shares were trading.
Nasdaq.com noted that full-year 2025 revenue, net of interest expense, came in at $72.2 billion, a 10% year-over-year increase, and that the company has now guided for a similar growth rate in 2026. The piece framed the stock's decline as a potential entry point, though it stopped short of a recommendation.
What to watch
The central question is whether American Express's cost growth stabilizes or continues to outpace revenue. Card member services expenses rising 36% in a single quarter is a number that demands an explanation, and the reports do not provide one beyond the general point that the company is investing in engagement. If cardholder spending holds and those costs level off, the margin story improves. If spending softens while costs stay elevated, the current multiple becomes harder to defend.
The gap between the 12% and 17% decline figures across outlets is also a reminder that the stock has been moving. Investors tracking this one should verify the current figure rather than relying on any of the numbers cited here, all of which reflect specific dates in October.
Sources
1. 4 Reasons American Express Stock Is Having Its Worst Year Since 2015 Despite Record Earnings, fool.com
2. American Express is set to rebound thanks to strong demand for premium credit cards, says BMO, cnbc.com
3. American Express Stock Has Fallen 12% in 2026. Time to Buy, nasdaq.com
Bear Creek Capital Network publishes content for informational and educational purposes only. Nothing in this article constitutes financial, investment, tax or legal advice, or a recommendation to buy or sell any security. Consider your own circumstances and consult a qualified professional before making financial decisions.