Our report on American Express is updated and rated (lower) Buy at $117.35. Its revenues and particularly its earnings are down due to the pandemic such that it looks somewhat expensive in relation to earnings. But if we assume that it will recover and grow after the pandemic then it is reasonably valued. It is a high quality company that should be a decent long-term hold. But VISA may be a better choice. I’d be interested in adding to my very small America Express position if the price were to drop back under $100 which however may not be too likely…
American Express makes most of its revenue and earnings from the discount fees it charges merchants. But becasue it must finance customer’s purchases for about 30 days in many cases and much longer in for those that run balances, it has a balance sheet that looks very much like a bank. In fact it is a bank holding company. But I would not consider this to be much like a standard bank.