American Express: Headline Beat Flattered by Tax and Reserve Release; Softer Billings and Expense Pressures Temper the Print

AXP reported 3Q26 diluted EPS of $5.42 (adjusted EPS of $4.68), above consensus of $4.49 and JPMorgan's estimate of $4.45, helped by a discrete tax item (+$0.29/sh), a CECL model update (+$0.24/sh) and partly offset by legal costs (-$0.51/sh). Provision expense of $985M came in well below the $1.33B consensus and $1.43B JPM estimate and included a $211M net reserve release, of which $215M stemmed from the CECL model update; excluding that benefit adjusted EPS would have been ~$4.44, roughly in line with expectations. Billed business rose 8% Y/Y to $454.0B, slightly below forecast, while expenses were pressured by the new U.S. Platinum benefits. Management raised FY26 GAAP EPS guidance to $18.30-$18.60 ($17.60-$17.90 adjusted) and reiterated 10% revenue growth. JPMorgan maintains Overweight and lifts its Dec-2027 price target to $365 from $360, applying 15.75x to 2028 adjusted EPS of $23.21, implying ~15.5% potential total return.