American Express Valuation Makes It a Buy Again

American Express is a great business but not necessarily a good investment at any given time. The company has a track record of steady revenue and profit growth, strong brand strength, and pricing power thanks to its annual fees.

The business model benefits from network effects as it operates a two-sided payment platform. However, when valuations get too high, the stock can become overpriced and lead to poor investment returns.

Taking American Express as an example, in 2026 the credit card company traded at a price-to-earnings (P/E) ratio of around 24 but has since fallen by 17% due to high valuation. The current P/E multiple is under 19, making it a better entry point for investors.

The S&P 500 index has climbed 13% this year, and American Express stock now offers a more attractive price. Before investing in the company, consider that the Motley Fool's Stock Advisor analyst team did not recommend buying shares in American Express.