American Express Falls 3% Despite Q3 Beat and Higher Profit Floor; Visa and Mastercard Slip

A higher profit floor isn’t protecting American Express (NYSE:AXP | AXP Price Prediction) from a skeptical response to its Q3 2026 report. American Express shares are at $316.65, down 3% in morning trading, a sharp drop for a card company that just lifted its full-year earnings forecast. That reaction cuts against a report that delivered on adjusted earnings, guidance and credit quality.

Meanwhile, Visa (NYSE:V) shares are trading at $411.99, down 0.6%, a far smaller slide that suggests the selling is concentrated in the issuer. Mastercard (NYSE:MA) shares are at $630.05, down 0.5%, a similarly mild dip that keeps the network well clear of the issuer’s losses.

Financial stocks are softer as a group, though by a smaller margin. The Financial Select Sector SPDR ETF (NYSEARCA:XLF) is at $56.20, down 0.8%. Against that background, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is at $760.39, down 0.5%, leaving financials slightly behind the broad market while American Express shares absorb a much heavier hit.

Adjusted Beat Clears the Bar With Caveats

American Express reported quarterly results before the open, and its adjusted earnings per share (EPS) of $4.68 topped the consensus estimate of $4.51. On a generally accepted accounting principles (GAAP) basis, the company’s EPS of $5.42 landed well above the adjusted number because it included a $982 million pre-tax gain from selling its stake in a corporate travel business. Stripping out that gain makes the adjusted figure the cleaner read on the operating beat.

Management at American Express raised the low end of its full-year adjusted EPS forecast and kept the top end in place, putting the range at $17.60 to $17.90. Chief Executive Stephen J. Squeri stated, “Our business momentum continues, with strength in billings, new acquisitions and Card Member retention, and excellent credit quality.” That momentum shows up in Card Member billed business, which reached $454 billion, up 8% from a year earlier.

Card Issuer Model Sets American Express Apart

The American Express Platinum Card anchors that issuer model. After American Express raised the U.S. Platinum annual fee by $200, nearly all cardmembers who moved onto the pricier product kept it. In the latest quarter, card fees rose from a year earlier and average spending per member climbed, a sign that the price increase hasn’t driven customers away.

Credit quality at American Express held firm, with the net write-off rate improving to 1.8% from 1.9%. Discrete one-time benefits pushed the company’s effective tax rate down to 18.1% from 24.1%, which lifted net income. Benefits of that kind sit outside the recurring business and put more weight on the operating trend.

Total revenue at American Express came in at $20.06 billion, missing the $20.12 billion estimate. Paired with the lower tax rate, that shortfall gives skeptics room to question the quality of the beat even as the forecast floor rose. Neither Visa nor Mastercard carries a lending book, which keeps credit costs and reserve changes off each network’s income statement.

Platinum’s Full Fee Year Decides the Next Move

What remains uncertain for American Express is whether cardmember spending keeps growing as the higher Platinum fee runs through a full year. Strong retention supports the bull case, while a revenue miss keeps the bear case alive.

Visa and Mastercard shares carry heavier weights than American Express shares in the Financial Select Sector SPDR ETF, according to the fund’s June 30 holdings report, which ties the ETF’s direction more closely to the networks. For Visa and Mastercard, the next test is whether payment volumes keep growing while lending losses stay with the banks.

American Express’s next quarterly report will show whether card fee gains keep exceeding the cost of richer Platinum benefits. Until then, AXP shareholders should size their positions carefully given the revenue miss and tax-aided earnings.

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