The recent American Express stock selloff has been “overblown,” according to Morgan Stanley. With shares trading at their lowest levels in years, the company believes it is now a good entry point for investors. Morgan Stanley has an overweight rating on American Express stock, calling it a top pick. His $188 price target implies the stock will rally 24.4% in the coming months. “Amex hasn’t traded this cheap in P/E since 2019, priced at 12x P/E on a steeper slowdown in growth. Yes, discretionary spending is slowing, but this is already built into consensus estimates.” wrote analyst Betsy Graseck. in a note on Friday. “From here, AXP offers 1) highest revenue growth, 2) strong operating leverage, 3) best credit quality,” she added. American Express shares have struggled this quarter, losing 8%. So far this year, they have risen 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 stock valuations are now pricing in too much of a slowdown, implying growth of just 7% over the next two years. Meanwhile, Morgan Stanley estimates a compound annual growth rate of approximately 13%. To be sure, she added that while loan growth is very strong, Amex’s loan and receivable balance is still low relative to its pre-Covid levels. —CNBC’s Michael Bloom contributed to this report.