American Express Shares Drop Despite Q2 Earnings Beat
American Express (NYSE:AXP) shares fell nearly 6% following its second-quarter earnings report despite beating expectations. The company reported EPS of $4.53, surpassing the consensus estimate of $4.40 and raising full-year revenue guidance to 10%. However, it maintained unchanged FY2026 EPS guidance at $17.30–$17.90 as management chose to reinvest gains into growth initiatives rather than boost bottom-line results. American Express's expenses rose by 12% year-over-year to $14.5 billion and its effective tax rate increased from 19% to 24%, compounding investor concerns. Meanwhile, peers Visa (NYSE:V) and Mastercard (NYSE:MA) saw stable stock prices on the day, indicating that American Express's decline was company-specific rather than a sector-wide issue. The Financial Select Sector SPDR Fund (XLF), which includes all three companies, remained flat at $55.78, reinforcing the idea of an idiosyncratic move.