Americas Banks Regional Key Takeaways from AXP and FHB earnings

Equity Research 24 July 2026 | 7:13PM EDT

Americas Banks: Regional: Key Takeaways from AXP and FHB earnings; updating EPS for FCNCA and HBAN post-EPS

AXP: See revenues at top of range (10%); card fee growth to re-accelerate and exit Ryan M. Nash, CFA | at high-teens Goldman Sachs & Co. LLC

AXP reported mixed 2Q26 results as a bottom-line EPS beat on lower provisions was Lucas Haimes | overshadowed by a slight top-line miss while VCEs (business development) was a Goldman Sachs & Co. LLC touch elevated vs. expectations. The revenue miss was driven by slightly lower NII and a small miss on card fees although card fees are expected to re-accelerate from here back towards the high-teens. The focus was on its outlook which is what we think was the major driver of the underperformance. While revenues are up 10% YTD and given the strength it has seen, we believe (based on conversations) some investors were hoping for a more upbeat tone on top-line growth for the year (now sees ~10% growth from 9-10% prior) and despite taking up revenue growth to the high-end of its range there was no change to EPS as AXP is going to reinvest the upside in customer acquisition and technology. So the combination of these weighed on the stock, although we would highlight that it appears expectations had gotten too high given the spend we’ve seen elsewhere although some of the drivers (like gas) are not big drivers of AXP’s business.

Shares underperformed (-4.3% vs. other card stocks at +0.70%) as the market digested the results and updated outlook. While shares fell almost 5%, with shares trading at ~16x 2027E, we think this creates a decent entry point and believe you could see a reversal of this UP. In fact, we come out upbeat for a handful of reasons, including: 1) while billings were slightly higher than expected, we are seeing positive signs as commercial rebounded to +5% with organic driving the upside while US consumer saw 11% growth with the platinum refresh a major driver and despite headwinds in its commercial business (Lowe’s, AMZN Small Business). AXP sounded confident that it can continue to drive this level of revenue growth. While the market may be disappointed that they chose to reinvest the upside from higher revenues / reserve release, this should help drive sustainability into 2027, 2) while card fees slowed to 15% in 2Q, it was timing driven based on the slowdown from the Gold refresh and as the benefits from platinum kick in driving growth to the high teens, AXP should have strong runway in this area given it takes 2 years to see the full impact. This should support its ‘fly wheel’ approach and help top line growth well into 27 and 28, 3) while VCEs came in higher than expected (+17% YoY; in-line with 1Q) mgmt. sounded confident that the growth rates should begin to slow as it laps the platinum impacts (started in late 3Q25). This should set AXP up well for another year of mid-teens earnings growth in 2027. Post results, shares trade at ~16x our 2027E, below the levels it had traded last year (got to >20x) and we think shares

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Goldman Sachs Americas Banks: Regional

could re-rate back to 17.5x-18x as the market gets more comfortable with the outlook for growth into 2027. As this happens, this company should remain one of the best compounders in financials and shares should have strong upside form here.

Exhibit 1: AXP Guidance summary 2026 Guidance Table AXP

- Expect card fee growth to pick up as year progresses, exiting year in high teens from Platinum refresh impact - Card and loan receivables are expected to grow in line with billed business -Anticipate billed business has to accelerate in order to reach 10%+…