Is American Express Co. overvalued or undervalued?

As of 24 April 2025, the valuation grade for American Express Co. has moved from fair to expensive, indicating that the company is currently overvalued. The key ratios reveal a P/E ratio of 21, a Price to Book Value of 6.79, and an EV to EBIT of 7.88, all suggesting a premium valuation compared to its peers. Notably, American Express has a ROE of 32.69%, which is impressive, but the overall valuation metrics do not support a favorable investment case at this time.
In comparison with peers, Discover Financial Services is rated attractive with a P/E of 22.07, while United Rentals, Inc. is also expensive with a P/E of 29.13. This peer comparison underscores that American Express is trading at a higher valuation relative to its performance metrics. Furthermore, while American Express has outperformed the S&P 500 with a 1-year return of 30.06% compared to 10.26% for the index, the current valuation suggests that investors may want to exercise caution before entering or adding to positions in the stock.