American Express (NYSE: AXP) received an upgrade from Hold to Buy at Freedom Broker following its first-quarter 2026 results, which exceeded analyst expectations across earnings per share, revenue and return on equity metrics.
Freedom Broker analyst Mikhail Paramonov raised the price target from $325 to $370, citing the company’s operating leverage, a lower-than-expected reserve build and the contribution from share repurchases as the key drivers behind the beat. The stock was trading around $312 at the time of the upgrade, implying upside of approximately 18% to the new target, and has since fluctuated in a range between $310 and $315 over the most recent trading session.
American Express reported Q1 EPS of $4.28, representing an 18% year-on-year increase and landing 7% above the consensus estimate. Revenue for the quarter reached $18.91 billion, up 11% from the prior year and 2% ahead of forecasts. The company’s return on equity stood at 34%, reflecting the structural profitability advantages that its premium card and travel-oriented customer base tend to generate across economic cycles. The combination of top-line growth, earnings leverage and capital returns is exactly the mix that drives analyst upgrades, and Freedom Broker’s response sits within a broader pattern of constructive reactions to the quarter from the sell-side community.
Despite the strong quarterly performance, management maintained full-year guidance rather than raising it, which Paramonov acknowledged “slightly cooled market sentiment” immediately following the results. That conservatism is not unusual for American Express, which historically updates guidance incrementally rather than making bold revisions on strong quarters.
The company is dealing with real uncertainties in its premium customer segment, particularly around business travel recovery timelines and the potential impact of sustained higher rates on discretionary spending. Management’s decision to hold guidance gives them flexibility if macroeconomic conditions deteriorate further through the second half of the year.
Paramonov’s new price target is built on a forward price-to-earnings multiple of 18 times forward EPS of $20.40, covering the period from the second quarter of fiscal 2027 through the first quarter of fiscal 2028. That multiple sits modestly below the current trailing P/E of approximately 19.5x, suggesting the analyst sees the current stock price as slightly stretched on an immediate valuation basis but justified by the earnings growth trajectory that makes the stock more attractively valued on a forward basis. InvestingPro’s analysis flags the stock as overvalued relative to intrinsic value at current levels, which creates a natural tension between the bullish analyst call and the quantitative valuation signal.
The broader backdrop for American Express is complex. The company announced a planned exit from its remaining Global Business Travel stake, which BofA described as a positive step in a note issued in early May. The James Beard Foundation partnership, launched as a marketing and brand alignment initiative in late April, reflects AmEx’s ongoing strategy of associating the brand with premium lifestyle experiences rather than competing on fee rates or points values with mass-market card issuers. These decisions collectively reinforce the positioning that has supported a premium multiple for the stock over multiple market cycles.
At 47 analyst ratings in the last year, the coverage universe for American Express is substantial, and the diversity of views reflects genuine disagreement about whether current earnings growth is sustainable in a higher-for-longer interest rate environment. The Freedom Broker upgrade adds weight to the bull camp, but the maintenance of guidance by management suggests the company itself is not yet prepared to endorse the more optimistic scenario. For investors, the key data point to watch in Q2 is whether card spending volumes hold up in the face of continued consumer caution, particularly in the premium travel and entertainment categories that define AmEx’s revenue mix.
