Signal Ledger LabSignal Ledger valuation · AXP
American Express Co
What the shares are worth today on our research (cited consensus, company plans and peers, since management sets no usable targets): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jun 30, 2026.
- Business value at FY2030
- $295B
- FY2030 net income
- $16B
- FY2030 EPS · P/E
- $24.04 · 18×
- Discount rate (WACC · equity)
- 9.14% · 9.14%
How this is built. Management gives long-run revenue/EPS growth ambitions, but no usable dated common-ROE target; retain reconstructed FY2025 common ROE under rule 16 rather than fabricate a return target. Each input below shows its basis: consensus, company plan, peer or rule.
Latest quarter in this research: Q2 2026
Reported Jul 24, 2026 for the quarter to Jun 30, 2026 (company release ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| U.S. Consumer Services | $9.52B | +11% | — | — |
| Commercial Services | $4.50B | +7% | — | — |
| International Card Services | $3.62B | +12% | — | — |
| Global Merchant and Network Services | $2.10B | +8% | — | — |
| Corporate & Other including rounding | −$0.10B | — | — | — |
- Reported pretax income after funding costs/provisions was $4.071B; operatingIncomeB is null because bank pretax income is not industrial EBIT. Source: https://www.sec.gov/Archives/edgar/data/4962/000000496226000322/axp-20260630.htm
- Revenue is total revenues net of interest expense, including net interest income; evidence 2025 revenue 41.304B is an incomplete noninterest-only extraction. Reported segment totals 19.742B less corporate/eliminations 104M round to consolidated 19.637B;1M rounding retained in displayed residual.
- Billed business 455.8B increased 9%; net interest income 4.649B increased 11%. Revenue includes net interest income and reported segment/corporate reconciliations from the same 10-Q.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| American Express (firm-wide)Financial services | Return on equity (residual income) | — | $233B | $344.99 | 5.8× P/B | 56% |
| All businesses | — | $233B | $344.99 |
From 2030 back to today
- Enterprise value at end of FY2030$295B
- Less net debt at FY2030$0B
- Equity value at FY2030$295B
- ÷ (1 + 9.14%)^4.5 years at the cost of equity$199B
- + dividends paid on the way, discounted$34B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 0.0%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$233B
- − borrowings$0B
- − finance leases$0B
- + cash and short-term investments$0B
- ÷ diluted shares0.675B
- Signal Ledger valuation$344.99
Valued on common equity: a financial company's deposits, borrowings, cash and preferred stock are part of the balance sheet it earns its return on, so they are not deducted again.
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $0B | $15B | $0B | $8.1B | $0B |
| FY2027 | $0B | $16B | $0B | $8.5B | $0B |
| FY2028 | $0B | $17B | $0B | $9.4B | $0B |
| FY2029 | $0B | $19B | $0B | $10B | $0B |
| FY2030 | $0B | $21B | $0B | $11B | $0B |
What must be true
- The company spends $0.0B of capital expenditure through FY2030.
- The company stays net cash throughout (lowest point $0.0B of net cash in FY2025).
- American Express (firm-wide) keeps earning 35.1% on its equity, against a 9.14% cost of equity.
What the price implies
Joint sales and margin requirements do not apply to this financial model.
At the research price of $325.17 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
- Implied discount rate
- 9.5%
- All-business FY2030 sales factor
- —
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.1% WACC · 9.1% cost of equity.
This model has no margin or capacity revenue paths to scale. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
Single-business sales and margin comparisons do not apply to asset, financial, project or REIT valuation lines.
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 9.14%
- WACC
- 9.14%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.05 after Blume adjustment × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 13 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Common equityAmerican Express (firm-wide) | $32.7B | Reported | June ending shareholders equity 34.280B less SeriesD liquidation preference 1.600B =32.680B common equity. Preferred par rounds to zero but the economic claim is not zero. sec.gov ↗ |
| Return on equity FY2026American Express (firm-wide) | 35.1% | Reported | FY2025 net income 10.833B less preferred dividends.058B =10.775B / average total equity 32.265B less 1.600B preferred =35.1378% common ROE. Company 33.9% uses total net income/total equity and is not common ROE. sec.gov ↗ |
| Return on equity FY2030American Express (firm-wide) | 35.1% | Reported | latest return held without a management target (methodology §4.6) sec.gov ↗ |
| Payout ratioAmerican Express (firm-wide) | 70.5% | Reported | FY2025 common repurchases 5.311B + declared common dividends 2.286B =7.597B / common income 10.775B=70.5058%; excludes preferred and employee tax-withholding purchases. sec.gov ↗ |
| Terminal growthAmerican Express (firm-wide) | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| WACCDiscount rates | 9.14% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 9.14% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.05 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 23.6% | Reported | Q2 reported pretax 4.071B and net 3.110B imply 23.60599% effective tax, including discrete taxes. ROE uses after-tax common profit. sec.gov ↗ |
| Cash and short-term investmentsBalance sheet | $0.0B | Reported | cash: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| BorrowingsBalance sheet | $0.0B | Reported | borrowings and deposits: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| Finance leasesBalance sheet | $0.0B | Reported | finance leases: inside the common equity the financial line is valued on (methodology §3.7) balance sheet 2026-06-30 |
| SharesBalance sheet | 0.675B | Reported | shares outstanding as of 2026-07-14 cover page of 10-Q 0000004962-26-000322 |
| Dividends per yearShareholders | $0.0B | Rule | Financial distributions already include common dividends and buybacks; disable the separate dividend add-on.: paid out of the financial line's earnings at its payout ratio (methodology §3.7) sec.gov ↗ |
Research notes
- share-count comparison: 0.679B quarter 2026-04-01..2026-06-30 · 0000004962-26-000322; point-in-time denominator retained
- valued on common equity (financial lines): cash, borrowings, deposits and preferred are inside it, not deducted again; dividends come from the payout ratio
- cost of equity 9.14% (β 1.05 after Blume adjustment), WACC 9.1%
- American Express (firm-wide): residual income on $32.7B of common equity, earnings = ROE × equity, payout 71% (methodology §3.7)
Signal Ledger research built from cited consensus, company plans and peer economics because management sets no usable targets — not a forecast and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →