Bank of America on Friday upgraded its rating on American Express (AXP, Financials) to "buy," citing the company's ability to weather a potential U.S. recession due to its affluent customer base and past performance in economic downturns.

The firm lowered its price target for the credit card issuer to $274 from $325, reflecting expectations of slower consumer spending that could affect revenue and earnings. Despite the downward revision in target, analysts highlighted the 15% year-to-date drop in American Express shares as a chance for long-term investors to purchase a high-quality financial stock at what they consider a reasonable valuation.

Shares of American Express closed at $252 on Friday, rising 2% in late trading after the report. Analysts described the firm's customers as high-income and creditworthy, suggesting their behavior would help limit losses and keep earnings relatively stable.

Bank of America noted that the macroeconomic outlook is weakening, with gross domestic product growth likely slowing in the near term. Nonetheless, analysts believe the company is better positioned than its peers and has outperformed both other card issuers and the S&P 500 during prior periods of volatility, including the COVID-19 crisis and the U.S.-China trade war during the Trump administration.

American Express is expected to report first-quarter earnings on Thursday. Bank of America analysts said investor focus will likely be on the company's 2025 guidance rather than whether the upcoming results meet or miss forecasts. In the last quarter, American Express reported earnings in line with estimates and cited strong spending trends through the holiday season.

Bank of America attributed its reduced price target to trimmed revenue and earnings projections amid concerns that consumers may scale back spending in coming months. Still, analysts reiterated the company's historical resilience, strong brand, and customer loyalty as factors that support long-term value.