American Express (AXP): Has the Multi‑Year Rally Left the Stock Overvalued?

American Express (AXP) has been on a strong multi year run, and the stock’s latest move has investors asking a simple question: how much of the growth story is already priced in.

See our latest analysis for American Express.

Over the last year, American Express has quietly stacked up a powerful track record, with a year to date share price return of 25.83 percent and a five year total shareholder return above 240 percent. This suggests momentum is still very much intact despite the recent pullback toward 375.52 dollars.

If Amex’s run has you thinking about what else is working in this market, it could be a good moment to explore fast growing stocks with high insider ownership for more high conviction ideas.

With shares now trading slightly above Wall Street price targets and the company still posting healthy high single digit growth, investors face a pivotal question: Is American Express undervalued or is the market already pricing in its future expansion?

Most Popular Narrative: 5.8% Overvalued

With the most widely followed narrative placing American Express’s fair value below the recent 375.52 dollars close, the story focuses on premium growth and resilient margins.

Double digit international growth, ongoing investments in global product innovation, and expanding merchant acceptance tap into the expanding global middle class and increased digital payment adoption, expected to raise transaction volumes and support both top line growth and long term earnings diversification.

Read the complete narrative.

Curious how steady double digit expansion, stable margins, and a rich future earnings multiple combine into this price tag? The full narrative breaks down the math.

Result: Fair Value of $354.83 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying premium card competition and shifting payment habits toward wallets and BNPL could pressure margins and slow the double digit revenue trajectory.

Find out about the key risks to this American Express narrative.

Build Your Own American Express Narrative

If you see the story differently or just prefer to dig into the numbers yourself, you can build a personalized view in minutes: Do it your way.

A great starting point for your American Express research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Do not stop with one great company when you can quickly scan the market for more opportunities using the Simply Wall Street screener and stay a step ahead.

• Capitalize on mispriced opportunities by reviewing these 917 undervalued stocks based on cash flows that strong fundamentals suggest the market is still overlooking today.
• Ride powerful technology tailwinds by targeting these 24 AI penny stocks positioned to benefit from accelerating adoption of intelligent software and automation.
• Strengthen your income stream by evaluating these 13 dividend stocks with yields > 3% that can help support long term returns through reliable cash payouts.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com