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Abel's American Express Bet: A Long-Term Compounding Opportunity

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AXP V
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Greg Abel made significant changes as Berkshire Hathaway CEO, including selling stakes in Visa and Mastercard. However, he retained American Express, a holding that has been with Berkshire for decades.

American Express is underperforming its peers year-to-date, but it has strong fundamentals, generating all-time high revenue and earnings. The company forecasts 10% year-over-year revenue growth in 2026.

The price-to-earnings ratio of American Express has decreased to 19.6, with a forward P/E of 16.3, lower than Visa's and Mastercard's forward P/E of around 25.

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