Could Amex’s Flexible Surcharge Stance Reshape Its Premium-Member Strategy and Moat in Payments (AXP)?

• Recently, American Express CEO Steve Squeri addressed potential increases in merchant surcharges following the Visa-Mastercard settlement, emphasizing that extra fees on Amex card purchases would hurt the customer experience and noting the company’s readiness to adjust its “honor all cards” approach if surcharge practices escalate.
• At the same time, management outlined a clear growth playbook centered on adding cardholders who spend more and paying higher annual fees, reinforcing American Express’s confidence in its premium model while rising leaders like Anna Marrs gain external recognition for leadership potential.
• We’ll now examine how American Express’s willingness to adapt its honor-all-cards stance could influence the company’s broader investment narrative.

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American Express Investment Narrative Recap

To own American Express, you generally need to believe in its premium, fee-based model and the spending power of its higher-income cardholders. The biggest near term catalyst remains its ability to keep growing high-spend, high-fee accounts, while a key risk is rising rewards and customer engagement costs in a fiercely competitive premium space. The latest comments on surcharging do not appear to materially change that near term setup, but they could shape how network economics evolve.

The most relevant recent development here is management’s reaffirmed growth playbook, which focuses on signing up cardmembers who spend more and accept higher annual fees. That approach ties directly into both the core catalyst of premium fee and spend growth and the risk that rewards and benefits spending rises faster than revenue over time, particularly if competitive pressure intensifies or travel and entertainment spend slows.

Yet behind American Express’s premium story, there is a less obvious risk that investors should be aware of if merchant fees and rewards pressures both start to...

Read the full narrative on American Express (it's free!)

American Express' narrative projects $85.7 billion revenue and $13.5 billion earnings by 2028. This requires 10.6% yearly revenue growth and a $3.5 billion earnings increase from $10.0 billion today.

Uncover how American Express' forecasts yield a $354.83 fair value, a 7% downside to its current price.

Exploring Other Perspectives

Compared with the baseline view, the most bearish analysts were already assuming slower momentum, with revenue only reaching about US$80.3 billion and earnings about US$12.2 billion by 2028, and they worry that surcharging and travel spend headwinds could make those cautious assumptions look more realistic than many investors currently expect.

Explore 7 other fair value estimates on American Express - why the stock might be worth 16% less than the current price!

Build Your Own American Express Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free American Express research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate American Express' overall financial health at a glance.

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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.

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