American Express Company (AXP) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Financial Services · Credit Services
Is American Express Company a safe investment right now?
American Express Company's Altman Z-Score of 0.82 places it in the distress zone. Our valuation model estimates fair value at $473.88, suggesting the stock may be undervalued by 30%. Moat rating: 2.3/5 stars.
Could American Express Company go bankrupt? Altman Z-Score analysis
Z-Score of 0.82 falls below the 1.8 distress threshold, indicating significant financial stress.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives AXP's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0 | 1.2 | 0.0 |
| B · Retained Earnings / Total Assets | RE / TA | 0.0848 | 1.4 | 0.12 |
| C · EBIT / Total Assets | EBIT / TA | 0 | 3.3 | 0.0 |
| D · Market Cap / Total Liabilities | MCap / TL | 0.939 | 0.6 | 0.56 |
| E · Revenue / Total Assets | Rev / TA | 0.1425 | 1.0 | 0.14 |
How has AXP's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2016 | 1.05 | Distress |
| 2017 | 1.07 | Distress |
| 2018 | 0.91 | Distress |
| 2019 | 1.05 | Distress |
| 2020 | 1.02 | Distress |
| 2021 | 1.05 | Distress |
| 2022 | 1.03 | Distress |
| 2023 | 0.93 | Distress |
| 2024 | 0.85 | Distress |
| 2025 | 0.82 | Distress |
Source: Calculated from AXP's latest 10-K filing on SEC EDGAR.
What is American Express Company actually worth?
Fair value range: $333.83 — $687.48
Valuation Methods
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $333.83 | 50% | 16.6x avg PE (4 years) × $20.11 forward EPS |
| DCF (Discounted Cash Flow) | $687.48 | 30% | Two-stage DCF: $16.4B TTM FCF, 12.7% growth, 9.1% WACC |
| EV/FCF Multiple | $503.63 | 20% | TTM FCF × 22x multiple + net cash |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 12.7% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | 14.2% | Consensus (23 analysts) |
| Analyst EPS Growth (Next Year) | 14.4% | Consensus |
| Historical 5Y FCF CAGR | 9.1% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 9.1% | CAPM (Rf=4.3% + 1.13*5.5%) |
| Net Cash / (Debt) | $-16,264M | Balance sheet |
| Base FCF (TTM) | $16.4B | Historical avg |
| Shares Outstanding | 685,783,466 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 9.1% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $385.87 | $285.15 | $322.95 | $205.75 |
| 2.5% | $446.72 | $327.59 | $372.26 | $233.99 |
| 5.0% | $516.53 | $376.09 | $428.72 | $266.08 |
| 7.5% | $611.78 | $441.18 | $505.03 | $308.18 |
Free Cash Flow History
| Year | FCF | Growth |
|---|---|---|
| 2019 | $12.5B | — |
| 2020 | $7.6B | +-38.9% |
| 2021 | $12.0B | +57.3% |
| 2022 | $4.1B | +-65.7% |
| 2023 | $13.1B | +218.4% |
| 2024 | $19.2B | +46.8% |
| 2025 | $17.0B | +-11.6% |
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does American Express Company have a durable competitive advantage?
Moat rating: 2.3/5.
What makes up AXP's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 2/5.
How stable is AXP's return on invested capital?
No ROIC history available.
| Year | ROIC | Trend |
|---|
Source: ROIC calculated from SEC EDGAR filings.
Is American Express Company's dividend safe?
Can American Express Company afford its dividend?
Payout ratio is 21.3%. FCF covers the dividend 13.8x. 50 consecutive years of payments.
American Express Company's key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $37.2B | $34.2B | $22.0B | Rising |
| Net Income | $8.4B | $7.5B | $3.1B | Rising |
| Free Cash Flow | $17.0B | $19.2B | $4.1B | Rising |
Common questions about American Express Company
Is American Express Company at risk of going bankrupt?
American Express Company's Altman Z-Score of 0.82 places it in the distress zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is American Express Company's estimated fair value?
Our valuation model estimates American Express Company's fair value at $473.88 per share. The current margin of safety is 30.4%. This estimate uses a PE-based approach with analyst consensus earnings.
Does American Express Company have a competitive moat?
American Express Company receives a moat rating of 2.3 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is American Express Company's dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
Before you invest in American Express Company, make sure you truly understand it.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
AXP analysis methodology: How we calculate fair value, Z-Scores, and moat ratings