Is AXP a good stock to buy? We came across a bullish thesis on American Express Company on r/ValueInvesting by Prime_Investor. In this article, we will summarize the bulls’ thesis on AXP. American Express Company’s share was trading at $340.36 as of June 26th. AXP’s trailing and forward P/E were 21.25 and 19.46 respectively according to Yahoo Finance.
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American Express Company, together with its subsidiaries, operates as an integrated payments company in the United States and internationally. AXP is presented as a high-quality financial services company with a strong moat supported by its closed-loop payment network and premium customer base, generating resilient earnings and consistent long-term growth.
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The company trades at a P/S of 2.75, P/E of 19.77, and a forward P/E of 16.03, reflecting a reasonable valuation relative to its quality. Earnings growth remains strong with 1-year growth of 14.20% and 5-year growth of 14.28%, while PEG of 1.12 suggests balanced growth to price alignment.
Free cash flow valuation also appears attractive with P/FCF at 13.75 and P/C at 4.62. Leverage is manageable with debt-to-equity at 1.73, while dividend yield stands at 1.06% with a conservative payout ratio of 21.33%. A discounted cash flow model estimates intrinsic value at $392.41, implying attractive upside from current levels. The valuation case is further strengthened by its comparison to Visa and Mastercard, where American Express trades at a relative discount despite similar network advantages and brand strength.
Additionally it remains the second largest holding in Berkshire Hathaway’s portfolio, reinforcing institutional confidence in its long-term durability and earnings power. American Express is viewed as a high-quality business with attractive upside potential, supported by steady growth, strong cash generation, and defensive characteristics.
It is considered an attractive long-term investment opportunity, backed by a premium spending base, resilient credit quality, and a strong global brand presence in travel and entertainment. These factors enhance the visibility of sustained earnings growth and long-term compounding potential.
Previously, we covered a bullish thesis on American Express Company (AXP) by Max Dividends and Serhio MaxDividends in May 2025, which highlighted dividend growth, buybacks, strong premium customer base and Buffett-backed resilience. AXP’s stock price has appreciated by approximately 14.92% since our coverage. Prime_Investor shares a similar view but emphasizes valuation-based upside and a 22% intrinsic value gap.
American Express Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held AXP at the end of the first quarter which was 83 in the previous quarter. While we acknowledge the risk and potential of AXP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AXP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
