As recession fears mount and market volatility increases due to tariff concerns, investors are scrambling to find stocks that can weather economic storms. American Express (NYSE:AXP) is now being seen as one of the most solid options.
The credit card giant recently posted impressive Q1 2025 results despite macroeconomic headwinds and maintained its full-year guidance, while competitors have pulled back their forecasts. Bank of America upgraded AXP stock to "Buy" due to its recession resilience.
American Express focuses on higher-income consumers who demonstrate greater spending resilience during economic downturns. This premium customer strategy creates a natural buffer against recession pressures that typically hit mass-market consumers first and hardest.
The company's "high-quality customer base should drive more durable earnings while keeping credit losses in-check," according to Bank of America analysts who recently upgraded the stock. This assessment is backed by hard data. American Express maintained a net write-off rate of just 2.1% in Q1 2025, which is unchanged from the prior year. Its 30+ day delinquency rate stood at just 1.3-1.4% and is below pre-pandemic levels.
It has also been solid during previous downturns. During the COVID pandemic, the Trump administration's 2016 trade war, and other periods of economic stress, AXP stock "outperformed not only other card issuers but also the S&P 500."
American Express kicked off 2025 with impressive first-quarter results that exceeded market expectations. The company reported earnings per share of $3.64 and surpassed the $3.48 forecast. Revenue also rose 7% year-over-year to $17 billion.
Management is confident in its decision to maintain full-year guidance despite growing economic uncertainties. American Express still sees 8-10% revenue growth for 2025 and earnings between $15.00 and $15.50 per share. This stands in stark contrast to many companies that have retracted their forecasts.
I believe AXP stock is a smart long-term buy. That said, the consensus price target at $289 implies just 8% upside. The downside buffer is likely why analysts are bullish.
