Despite widespread apprehension across Wall Street regarding a potential U.S. economic downturn, Bank of America has identified a potential bright spot in the financial sector. The institution suggests that current market conditions may present a favorable entry point for investors considering American Express stock, even as many anticipate economic headwinds.
Bank of America Upgrades Amex Stance
Bank of America (BofA) has notably shifted its perspective on American Express (AXP), elevating its recommendation for the credit card provider’s shares from Neutral to Buy. While the bank did revise its price target downwards to $274 from a previous $325, this new target still suggests a potential upside of around 11% from the stock’s recent closing levels. This move comes despite broader market concerns and a consensus forecast suggesting a greater than 60% chance of a U.S. recession.
Analyst Perspective: Seizing the Opportunity
Driving this upgrade is the analysis led by Mihir Bhatia at BofA. Bhatia argues that the significant drop in American Express’s stock price, which has fallen over 15% year-to-date in 2025, creates an attractive opportunity. “We believe the current pullback offers investors (with a long-term view) the opportunity to
buy a high-quality company at a reasonable valuation,” Bhatia commented. He acknowledged that overall spending is slowing down.
Focus on Consumer Resilience
However, BofA’s core thesis rests on the specific demographics served by American Express. “Spending is decelerating, but we believe the higher-income consumers that comprise Amex’s customer base will prove more resilient in terms of spending and credit,” Bhatia elaborated. This view is supported by BofA’s own research, which has observed that higher-income households have maintained stronger growth in card spending compared to their middle- and lower-income counterparts for more than a year. This resilience is seen as a key factor that could insulate American Express from the worst effects of a potential economic slowdown.
Wall Street Sentiment
Bank of America’s optimistic outlook is not universally held within the financial community. Analyst coverage of American Express reveals a more cautious consensus:
* Buy: 11 analysts
* Hold: 18 analysts
* Sell: 2 analysts
This distribution indicates that while BofA sees a clear buying opportunity, the majority of analysts currently recommend holding the stock, suggesting a degree of uncertainty about its near-term prospects.
Despite the mixed analyst sentiment and the year-to-date decline, AXP shares have recently shown some upward momentum. The stock has gained approximately 7.3% over the last five trading days, bringing its price close to the $251 mark.
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