QS Research · Michael Burry's Scion Capital analyst template · 2006
AMERICAN EXPRESS CO (AXP)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +12% · downside -20% · upside +22%
The market is de-rating a 34%-ROE franchise to 17.7x TTM earnings and 6.01x book because Q3 2026's 31% GAAP EPS growth leaned on a $982M pre-tax GBTG gain ($1.11/share) and an 18.1% tax rate against 24.1%, while adjusted EPS grew 13% - a quality-of-earnings and sentiment problem, not a franchise problem. The engine still runs: Q3 2026 revenue $20.062B (+9%), billed business $454.0B (+8%), FY2026 EPS guidance raised to $18.30-$18.60 GAAP ($17.60-$17.90 adjusted), CET1 10.9%, and $9.20B of TTM buybacks plus dividends, 75.6% of the $12.17B net income to common. But the price is not a discount: 18.1x the adjusted guide leaves no room for the mid-teens EPS target to disappoint, and 6.01x book means there is no asset floor if credit normalizes from a 2.1% write-off rate. Building all three cases off section 13's base (TTM to Sep 30, 2026 net income to common $12.17B, EPS $18.15) at today's 17.7x, as the multiple rule requires rather than section 13's 14x-21x band, gives +12.1% base, -19.9% downside and +22.1% upside: too little edge to be long, and far too little to short a compounder with record earnings. Verdict is watch - the de-rating is an opportunity forming, not yet the price.
Key numbers
- Share price: $320.99
- Market cap: $215.24B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $77.59B
- P/E (TTM): 17.7x
- Price / book: 6.01x
The 15 boxes
- ✓ 1. Long-form business notes
American Express is a bank holding company that earns money three ways from one closed-loop payments platform: card issuing (USCS, CS, ICS), merchant acquiring (GMNS) and a card network, with revenue generated primarily from card spending and secondarily from finance charges and fees. Between the FY2020 10-K and the FY2025 10-K the business roughly doubled in scale (revenue $21.97B FY2020 to $41.30B FY2025; net income to common $3.06B to $10.78B), reorganized from three reportable segments to four, and shifted from a 'spend-centric' framing to a 'Membership Model' with elevated lifestyle/partner benefits and 2025 product refreshes and bolt-on acquisitions. Concentration is high: the Delta cobrand was approximately 13 percent of worldwide billed business and approximately 21 percent of worldwide Card Member loans at December 31, 2025. As a Category III bank holding company with total consolidated assets above $250 billion it now runs against heightened capital and prudential standards.
- ✓ 2. Competitive advantage
AXP has a durable but contested advantage: it is the fourth-largest general-purpose card network by purchase volume, and brand recognition is listed as a principal competitive factor, but the 10-K describes intense competition for premium customers and cobrand partners. Revenue was $41.30B in FY2025 and net income to common $10.78B, up from $21.97B and $3.06B in FY2020; total equity was $33.47B at FY2025. The sources do not give operating income, ROE or P/B, so the durability of returns cannot be quantified from ratios here.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 9% to $20.1B and billed business rose 8%, with credit improving and CET1 at 10.9%. GAAP EPS of $5.42 included a $1.11 GBTG gain and $0.37 restructuring charge; adjusted EPS was $4.68, up 13%. Management raised FY2026 EPS guidance to $18.30-$18.60 ($17.60-$17.90 adjusted). The Q3 2026 10-Q risk-factor section only refers back to the 2025 Form 10-K.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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