According to Citi, it’s time to sell American Express. Analyst Arren Cyganovich downgraded American Express stock to sell from neutral, after modeling a mildly depressed financial stock during a recession. “As Citi’s economic team has forecast a modest US recession as a base case for the second half of 23, we feel cautious,” Cyganovich wrote in a note Thursday. when assuming a mild recession for its consumer finance stocks.” “While the recession is forecast to be mild, the impact on our EPS could be quite substantial as we are exiting a record low credit loss and currently projecting slightly higher than normal credit losses in 2024”. While some consumer finance stocks, such as Ally Financial and Capital One, are priced higher than in a recession, shares of American Express could be more challenged, according to the analyst. according to the analyst. The analyst’s $130 price target, down from $159, implies about a 5% drop from Wednesday’s closing price of $136.22. Shares rose 0.4% in pre-market trading on Thursday. “The downgrade of American Express reflects our view that the potential for a lower invoicing business has not been fully considered by investors because the volume of spending during previous recessions has declined,” he wrote. turns negative (we’re modeling growth slowing down to 2% but not negative)”. Still, despite the negative outlook, the analyst said he expects shares in American Express to “apply modestly” after reporting third-quarter results on the strength of spending trends. recent consumption. — Michael Bloom of CNBC contributed to this report.