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American Express Insights
American Express (NYSE: AXP) is a key holding for Berkshire Hathaway (NYSE: BRK.A, BRK.B), making up 15.9% of its $293.8 billion portfolio. Berkshire has not traded any shares of American Express since 2012, indicating a long-term investment strategy in this exclusive credit card issuer that focuses on lower-risk, higher-income consumers.
As of the end of 2024, only 0.8% of American Express’ consumer and small business loans were delinquent by more than 30 days. Analysts predict revenue growth at a compound annual growth rate (CAGR) of 8% and diluted earnings per share (EPS) growth at 12% from 2024 to 2027, driven by increased affluent customer spending and expanded travel-related offerings.
American Express’ stock, up about 290% in the last decade, is valued at 20 times projected earnings for next year, compared to 28 times for Visa and 35 times for Mastercard, suggesting a favorable valuation relative to its growth potential.
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