Could American Express Deliver 10% Annual Returns?

Is American Express still a durable, premium payments franchise after record 2025 revenue?
This segment examines Amex’s moat, credit quality, management, and regulatory risk (5-15% projected returns).
– Business moat: closed-loop model (issuer plus network) and a strong premium brand that supports differentiated economics
– Management: Stephen Squeri’s strategy rebuilt the premium franchise and expanded partnerships and co-funded benefits
– Financials: record revenue in 2025, continued double-digit growth, steady dividend growth, and typical card-issuer leverage
– Credit profile: materially lower net charge-off rates versus many peers, supporting more stable earnings through cycles
– Risks: cyclical credit losses in a recession and proposed caps on card interest rates (10% cited) could compress lending economics
– Takeaway: Amex offers attractive long-run return potential but requires scenario analysis for credit cycles and regulatory outcomes
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