AXP Valuation Reset Sparks Investment Interest

American Express (AXP) has seen its stock price drop by 17% year-to-date, underperforming the S&P 500's 13% gain over the same period. Despite this decline, experts believe that the premium credit card provider is now a more compelling investment opportunity.

One of the key reasons for this assessment is the recent valuation reset. At the start of 2026, AXP traded at around 24 times earnings, but as of September 25, its shares have fallen to 18.6 times earnings, a decline of 23% from the beginning of the year.

The company's fundamentals remain unchanged, with consistent revenue and profit growth over time. Annual membership fees reflect solid pricing power, backed by an extremely strong brand and network effects from its two-sided payment platform.

Two factors are set to drive shareholder returns: valuation expansion and earnings growth. The stock could see its P/E multiple rebound to 20 over the next five years, delivering valuation upside. Management has outlined guidance for mid-teens long-term growth in earnings per share, which, combined with valuation recovery, could double the share price within five years.