American Express Ups 2025 Profit Forecast Amid Strong Spending

UPDATE: American Express has just raised its 2025 profit and revenue forecasts as affluent customers continue to spend despite economic uncertainty. This announcement comes just ahead of the crucial holiday shopping season, highlighting a robust consumer appetite for luxury goods and travel.

Officials at American Express now anticipate earnings per share between $15.20 and $15.50 for the year ending on December 31, 2025, up from earlier estimates of $15 to $15.50. The company expects revenue growth of 9-10%, compared to the previous forecast of 8-10%. This adjustment underscores AmEx’s confidence in its affluent clientele as Black Friday and Cyber Monday approach.

The credit card giant is capitalizing on high-income consumers who are maintaining their spending, particularly in travel and luxury sectors. “Retail spend, which is the biggest category of spend we have, is actually growing at a base of 12%,” CFO Christophe Le Caillec stated in an interview with Reuters. This strong consumer behavior is shielding AmEx from broader downturns in the payments sector.

In the third quarter, AmEx reported record revenue of $18.4 billion, marking an 11% increase year-over-year, with profits of $4.14 per share, exceeding analyst expectations of $4. J.P. Morgan analyst Richard Shane predicts that AmEx shares will continue to rise due to this earnings beat and improved guidance for fiscal year 2025.

Despite emerging credit risks among lower-income borrowers, major lenders agree that U.S. consumers remain unexpectedly resilient. American Express, focusing on high-FICO score cardholders, is less exposed to credit stress and reported consolidated provisions for credit losses at $1.3 billion, slightly down from $1.4 billion a year prior.

The implications of AmEx’s updated forecasts are significant as they reflect a broader trend of high-income consumers defying economic challenges. As retailers prepare for the holiday season, this spending surge could impact various sectors, driving demand for luxury goods and travel experiences.

Investors and consumers alike will be watching closely as American Express navigates the upcoming holiday shopping rush. The question remains: can AmEx maintain this momentum through the end of the year? Stay tuned for more updates as this story develops.