As of June 12, 2025, American Express Co has a Discounted Cash Flow (DCF) derived fair value of $534.69 per share. With the current market price at $299.10, this represents a potential upside of 78.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $253.50 |
| DCF Fair Value (10-year) | $534.69 |
| Potential Upside (5-year) | -15.2% |
| Potential Upside (10-year) | 78.8% |
| Discount Rate (WACC) | 4.9% - 8.8% |
Revenue is projected to grow from $71644 million in 12-2024 to $150709 million by 12-2034, representing a compound annual growth rate of approximately 7.7%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 71644 | 10% |
| 12-2025 | 76119 | 6% |
| 12-2026 | 83402 | 10% |
| 12-2027 | 91969 | 10% |
| 12-2028 | 103209 | 12% |
| 12-2029 | 112466 | 9% |
| 12-2030 | 118082 | 5% |
| 12-2031 | 125260 | 6% |
| 12-2032 | 131523 | 5% |
| 12-2033 | 138099 | 5% |
| 12-2034 | 150709 | 9% |
Net profit margin is expected to improve from 14% in 12-2024 to 22% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 10129 | 14% |
| 12-2025 | 11868 | 16% |
| 12-2026 | 14177 | 17% |
| 12-2027 | 16863 | 18% |
| 12-2028 | 20235 | 20% |
| 12-2029 | 23406 | 21% |
| 12-2030 | 24846 | 21% |
| 12-2031 | 26640 | 21% |
| 12-2032 | 28268 | 21% |
| 12-2033 | 29989 | 22% |
| 12-2034 | 33059 | 22% |
with a 5-year average of $1671 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 1865 |
| 12-2026 | 2092 |
| 12-2027 | 2312 |
| 12-2028 | 2663 |
| 12-2029 | 3004 |
| 12-2030 | 3274 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 341 |
| Days Inventory | 0 |
| Days Payables | 208 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 12672 | 2453 | 1836 | 7640 | 743 |
| 2026 | 20058 | 3907 | 2682 | 3630 | 9838 |
| 2027 | 23692 | 4648 | 2957 | 6097 | 9990 |
| 2028 | 28328 | 5577 | 3319 | 10584 | 8848 |
| 2029 | 32702 | 6451 | 3617 | 6849 | 15785 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 253.50 | -15.2% |
| 10-Year DCF (Growth) | 534.69 | 78.8% |
| 5-Year DCF (EBITDA) | 178.90 | -40.2% |
| 10-Year DCF (EBITDA) | 304.15 | 1.7% |
Is American Express Co (AXP) a buy or a sell? American Express Co is definitely a buy. Based on our DCF analysis, American Express Co (AXP) appears to be significantly undervalued with upside potential of 78.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $299.10.