American Express has demonstrated impressive growth over the past year, with its stock soaring nearly 60%, fueled by the ongoing rise in American credit card debt, which has reached an all-time high of $1.2 trillion. The company has built a strong brand recognized for its cardholder perks and rewards, appealing particularly to high-spenders and small businesses. American Express is also adapting to market trends, integrating buy now, pay later (BNPL) options into its offerings, which have attracted a younger demographic. Analysts project that American Express will achieve an average earnings growth of 14% annually over the next three to five years, supported by a long-term revenue growth target of 10%. Despite the stock's high valuation, indicated by a PEG ratio of 1.4, it remains a solid buy for long-term investors. While returns may not match the previous year's surge, a reasonable expectation of around 15% annualized total returns makes it an attractive investment.
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