American Express Company (AXP.N) 3Q26 Review - Solid Quarter Trends, Though In-Line FY Bottom-Line Outlook Limits Upside

Citi reviews American Express (AXP.N) 3Q26 results. Despite a solid quarter with better NII (~6c tailwind to consensus), a lower core expense base (+1c) and continued credit improvement ($212 million reserve release and NCOs down 10bps y/y), AXP underperformed on earnings day (down ~3.68% vs BKX down ~0.76%) as updated FY adjusted EPS guidance of $17.60-$17.90 offered little incremental upside to expectations already at $17.75. Citi raises 2026E EPS by $1.00 to $18.40 (vs FactSet consensus $17.76), 2027E by 5c to $19.30 and lowers 2028E by 10c to $21.50; the 2026 revision includes ~28c from one-time items, ~22c from reserve release and ~31c from tax rate. Following the GBTG sale, Services fees and other revenue outlook is reset lower, partly offset by a better VCE/revenue ratio of ~44.3% against higher marketing expense. Target price cut to $335 from $340 after updating risk-free rates/ERP in the cost-of-equity framework; Neutral rating maintained.