Morgan Stanley on Thursday downgraded its recommendation on American Express from 'overweight' to 'in-line weighted', with a price target raised from $212 to $222, believing that the good news was now priced in.

In a sector note, the research firm points out that AmEx shares have outperformed their peers by 11% since the publication of the quarterly results.

A discrepancy that the analyst explains by the prospect of business growth in 2024, whereas investors feared on the contrary a contraction in revenues this year.

But the hardest part is yet to come", warns Morgan Stanley, who believes that the American issuer will have to prove that it can accelerate growth in its main line of business, cash-back credit cards (55% of annual revenues in 2023), after a slowdown throughout fiscal 2023.

With the stock now trading above its historical average, in this case a PER of 16x, Morgan explains that he prefers to stay away from the stock for the time being.

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