AmEx updates 2025 forecasts as affluent customers keep up spending

By Manya Saini and Arasu Kannagi Basil

Oct 17 (Reuters) - American Express AXP.N raised the lower end of its 2025 profit and revenue forecasts on Friday, as its affluent customers looked past economic uncertainty and continued spending ahead of the holiday season.

Analysts expect AmEx to benefit from spending by high-income customers, particularly on travel and luxury purchases, during Christmas, Black Friday and Cyber Monday holidays as retailers lure them with discounts.

Its focus on premium cardholders could help the credit card company navigate economic uncertainty while capturing a bigger share of consumer payments.

AmEx expects annual earnings per share between $15.20 and $15.50, compared with a prior forecast of $15 to $15.50. Revenue in 2025 is expected to grow between 9% and 10% compared with prior forecast of 8% to 10%.

The company's shares were up 4.5% in early trading. They have gained 14% so far this year.

SPENDING HOLDS UP

Higher-income consumers are still planning holidays and buying big-ticket discretionary items, shielding AmEx from the broader slowdown in the payments sector.

"Retail spend, which is the biggest category of spend we have, it's actually growing at a base of 12%," CFO Christophe Le Caillec said in an interview to Reuters.

AmEx's revenue jumped 11% to a record $18.4 billion in the third quarter. Profit of $4.14 per share exceeded expectations of $4, according to estimates compiled by LSEG.

"I don't see anything in the horizon here that would indicate that billings are going to slow down or decline," CEO Stephen Squeri told analysts.

PLATINUM REFRESH MOMENTUM

AmEx last month unveiled long-awaited upgrades to its U.S. Platinum cards, a strategy it has leaned on for years to outpace rivals.

CEO Squeri said early results exceed expectations. "New Platinum account acquisitions are running at twice the level before the refresh," he said.

While some credit risks are emerging among lower-income borrowers, there is consensus among the nation's largest lenders that the U.S. consumer remains unexpectedly resilient.

AmEx is less exposed to stress, as its business remains focused on cardholders with the highest FICO scores, reflecting minimal credit risk.