Is American Express Stock a Buy, Sell, or Hold With Shares Trading 20% Below Their 52-Week High?

American Express (NYSE: AXP) stock soared to a 52-week (and all-time) closing high of $384.79 per share on Dec. 11, 2025, capping a pretty spectacular three-year run for the credit card company. Fueled by the three-year bull market, a growing economy, declining inflation, and robust consumer spending, American Express stock returned 25% in 2025. That followed annual returns of 58% in 2024 and 27% in 2023.

Economic conditions are not quite as robust in 2026, with inflation rates rising and soaring gas prices curtailing travel and consumer spending. As a result, American Express stock has dropped from those December 2025 highs. Currently, the stock trades at around $310, off 20% from the 52-week high and down 16.3% year-to-date.

Heading into the fourth quarter, is American Express stock a buy, sell, or hold?

Image source: Getty Images.

Why American Express stock is down

While revenue growth has remained solid, up 10% year over year in Q2, earnings growth has declined a bit. In Q2, earnings rose 11% year over year compared to 18% growth in Q1 and 15% in Q4 2025.

A big part of that decline is due to American Express incurring higher expenses. In the second quarter, expenses rose 12% year over year, as the company increased spending on marketing to drive customer acquisition and on technology to pursue growth opportunities.

"You need to continue to invest in acquiring high revenue-generating cardholders and high-spending cardholders to continue the really good revenue growth that we've seen over the last few years. That's where you can think about these investments occurring," CEO Stephen Squeri said on the Q2 earnings call.

Also, some investors were concerned that while American Express raised its revenue guidance for the fiscal year to 10% growth, up from 9% to 10%, the company maintained its earnings guidance. That led to worries about higher spending for the rest of the year.

In the buy zone?

Also, a contributing factor to this year's American Express sell-off is its valuation. After three years of huge gains, American Express stock had become expensive, and investors may have decided to take some profits. Its price-to-earnings (P/E) ratio had climbed to 25 at the end of 2025, which is not high by tech stock standards, but it is high for American Express. It hadn't been trading at that high of a multiple since 2021.

Now the P/E ratio is down to 18, the lowest it's been in more than a year. Is that the signal to buy?

With the Fed raising interest rates this week, it presents an interesting conundrum for American Express. The higher rates will mean more net interest income, but it brings into question whether or not there could be even more pressure on the consumer, given still high gas prices and inflation.

I think American Express stock is a hold right now. Investors may want to wait until after the third-quarter earnings to see where the stock moves and how economic conditions are impacted by the rate move, among other forces. The buy signal just may have to wait until there's more economic clarity or a better entry point.

American Express is an advertising partner of Motley Fool Money. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express. The Motley Fool has a disclosure policy.