The recent sell-off in American Express shares has been “overdone,” according to Morgan Stanley. With the stock trading at its cheapest levels in years, the firm thinks now is a good entry point for investors. Morgan Stanley has an overweight rating on American Express shares, calling them a top pick. Its price target of $188 implies shares rallying 24.4% in the coming months. “Amex hasn’t traded this cheaply on P/E since 2019, with a 12x P/E pricing in a sharper slowdown in growth. Yes, discretionary spend is slowing, but this is already baked into consensus estimates,” analyst Betsy Graseck wrote in a Friday note. “From here, AXP offers 1) highest revenue growth, 2) strong operating leverage, 3) better credit quality,” she added. American Express shares have struggled this quarter, losing 8%. Year to date, they’re up 2.3%. Graseck said that while revenue growth is slowing from its post-Covid boom, it will remain more resilient than feared. She noted that the stock’s valuation is now pricing in too much slowing, implying just about 7% growth over the next two years. Meanwhile, Morgan Stanley estimates approximately 13% compound annual growth rate. To be sure, she added that while loan growth is very strong, Amex’s loans and receivables balance is still low relative to its pre-Covid levels. —CNBC’s Michael Bloom contributed to this report.