American Express Company

AI-generated fair value estimate for this company.

Method: Excess-return (residual income) model starting from book value per share $50.79 and current ROE 34.4%, fading ROE from 32% to 20% over 10 years (payout ratio rising 25% to 48%) against a 10% cost of equity, with a terminal stable ROE of 16% and 6.4% terminal growth capitalized at Yr10.

Reasoning: American Express is effectively a highly leveraged card-issuing financial institution whose value is driven by return on equity relative to cost of equity rather than free cash flow, so an excess-return/residual-income model is the rigorous choice.