BUZZ-"Street View" Perspective: American Express makes a big bet on growth, but faces huge reward cost pressures

October 26 - ** American Express AXP.N on Friday raised its 2026 profit forecast to above Wall Street expectations (link) and announced plans to cut 5% of its global workforce, roughly 3,500 positions, as part of a restructuring plan

** The median target price given by the 32 brokerages covering the stock is $367 — data compiled by London Stock Exchange Group (LSEG)

Returns, Restructuring and Restraint

** Piper Sandler (“Overweight”, target price: $415) said the planned layoffs could improve efficiency, but due to a lack of details regarding recurring cost savings and reinvestment, it is too early at this stage to view them as a significant profit driver

** Morgan Stanley (“Equal-weight”, target price: $380) noted that reinvestment for long-term growth is encouraging, but higher customer rewards and value customer engagement (VCE) costs could pose slight downside risks to 2027 earnings

** BofA Global Research (“Buy”, target price: $369) pointed out that although consumer spending growth is expected to slow, credit card fee income is rebounding, putting the company in a better position ahead of tougher year-on-year billing comparisons in 2027

** RBC Capital Markets (“Outperform”, target price: $400) continues to view AXP as a high-quality holding, and despite concerns over billings growth, its profit outlook and credit quality remain strong

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