AXP on Pace for 12% Annual Growth to 2031

Investors have been skeptical about American Express's (AXP) future growth due to rising costs and economic concerns. However, experienced investors know that short-term pullbacks are a normal part of long-term progress. Despite its recent decline, American Express has consistently shown steady revenue and earnings growth.

Data shows that the company's top and bottom lines have grown at a rate of around 10% and 12%, respectively, over the past few decades. While the current guidance update may suggest that expenses are outpacing sales, investors are overlooking a key detail: even at the low end of this year's profit guidance range, American Express is still on pace to grow its bottom line by 12.4% from last year's earnings.

Looking ahead to 2031, assuming history repeats itself and market valuations remain consistent with the past, American Express could be worth around $540 a share. Analysts maintain a 12-month price target of $380.57, which is 24% above the current price. New buyers may even get more performance than that, given the recent dip and subsequent discount.