Why American Express Stock Fell 6.5% Friday Morning

American Express stock dropped 6.5% despite beating Q2 earnings estimates ($4.53 EPS vs. $4.40 expected) and raising full-year revenue guidance to 10%. The decline reflects investor concerns that higher revenues won't translate to bottom-line growth, as management is reinvesting capital into growth initiatives and card perks, with operating expenses rising 12%. However, credit quality remains solid and the stock trades at a reasonable 15.9x forward earnings.