American Express Company (AXP): A Bull Case Theory

We came across a bullish thesis on American Express Company (AXP) on Substack by Chit Chat Stocks. In this article, we will summarize the bulls’ thesis on AXP. American Express Company (AXP)’s share was trading at $316.77 as of Feb 7th. AXP’s trailing and forward P/E were 22.61 and 20.70 respectively according to Yahoo Finance.

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American Express continues to demonstrate its resilience and impressive growth, with Q4 2024 showing an 8% YoY increase in total billed business. The company’s net write-off rate improved slightly to 1.9% compared to 2.1% in Q4 2019, signaling strong credit quality. Additionally, American Express experienced a robust 18% growth in net card fees. These metrics highlight the company’s solid performance and ability to thrive, even in more challenging environments. Over the long term, American Express has proven to be a remarkable investment, delivering a 100-bagger return since Warren Buffett’s purchase of the stock and a 21% total return CAGR over the past five years. The company has established a near-permanent inflation protection model, and its strong competitive advantages only tighten as it grows. Despite trading at elevated multiples, American Express remains one of the best businesses globally, with rare opportunities to buy shares at a discount offering significant upside potential. As long as the company continues to demonstrate consistent volume growth and cardholder additions, it remains a compelling investment for those seeking long-term stability and growth.

American Express Company (AXP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 62 hedge fund portfolios held AXP at the end of the third quarter which was 68 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 timeframe. If you are looking for an AI stock that is more promising than AXP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.