American Express (AXP, Financial) has seen a significant increase of about 130% since late October, reaching record highs. However, after reporting Q4 results, the stock experienced a temporary pullback due to profit-taking. Although AXP slightly exceeded EPS expectations, the upside was modest compared to previous quarters, and its FY25 EPS and revenue guidance met expectations without exceeding them.

Overall, AXP's results were solid, driven by resilient spending from its high-income customer base. The company also announced a 17% increase in its quarterly dividend to $0.82 per share, up from $0.70.

• Spending rose by 8%, boosted by a strong holiday season, with both Travel & Experiences (T&E) and Goods and Services (GNS) categories contributing. Millennials and Gen Z led the spending surge with a 16% year-over-year increase.
• Focusing on younger, affluent customers remains a core strategy for AXP, as these demographics show the fastest growth in premium product adoption.
• In 2024, AXP refreshed over 40 products globally, including the U.S. Consumer Gold Card, popular with younger customers. In 2025, AXP plans to refresh 35-50 products and enhance its membership model.
• AXP's affluent customer base is less affected by economic challenges, resulting in lower delinquencies. The net write-off rate was 1.9% in Q4, down 10 basis points year-over-year, with credit loss provisions decreasing by $100 million to $1.3 billion.
• Despite in-line FY25 EPS and revenue guidance of $15.00-$15.50 and $71.2-$72.5 billion, AXP anticipates solid EPS growth of 12-16% year-over-year, maintaining its long-term goal of mid-teens earnings growth.

AXP's Q4 results highlighted a 16% year-over-year EPS growth and increased spending across its network. The company's strong customer base and consistent performance affirm its status as a leading name in the credit card industry, despite the recent stock pullback attributed to profit-taking after its significant rise to record highs.