Amex will soon lose its deal as the only credit card Costco accepts in the U.S. But the company is already forming new relationships with other retailers, including Wal-Mart’s warehouse chain, Sam’s Club. It is also selling its Costco loans and cutting a billion in yearly expenses—both should lift earnings. Amex remains a buy.

AMERICAN EXPRESS CO. (New York symbol AXP; www.americanexpress.com) is one of the world’s largest issuers of payment cards, with 117.8 million cards outstanding in over 130 countries.

Amex issues two types of cards: charge cards, which have no preset spending limit and must be paid in full each month; and traditional credit cards, which let users carry a balance.

The company is also a bank that accepts deposits and makes loans. It cuts its credit risk by catering to clients with above-average incomes and good credit. Amex wrote off just 1.9% of its U.S. loans in 2015, up slightly from 1.8% in 2014. Its international write-off rate crept up to 2.2% from 2.1%.

In 2015, Amex’s revenue fell 4.0%, to $32.8 billion from $34.2 billion in 2014. In the U.S., average spending per card rose 0.7%. But spending fell 6.8% internationally, mainly because the higher U.S. dollar cut the value of those transactions. If you adjust for currency rates and the sale of 50% of its travel business in 2014, Amex revenue rose 4% in 2015.

Overall earnings fell 12.3%, to $5.2 billion from $5.9 billion. Earnings per share declined 9.2%, to $5.05 from $5.56, on fewer shares outstanding. Without unusual items, Amex earned $5.38 a share in 2015.

In March 2016, Costco will drop Amex as the only credit card it accepts at its U.S. stores. In response, the company is forming new alliances with other retailers, including Wal-Mart’s warehouse chain, Sam’s Club.

Amex now plans to sell its Costco loans and cut $1 billion from its annual costs in the next two years. These moves should increase its earnings to $5.55 a share in 2016, and the stock trades at just 9.9 times that figure. The $1.16 dividend yields 2.1%.

Recommendation in Wall Street Stock Forecaster: BUY.

For our report on another global leader in credit cards, read Visa deserves credit for moves into online, mobile shopping.

For our advice on how to choose the right growth stocks for your portfolio, read How to make better growth stock picks.