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American Express is one of Wells Fargo’s top picks for a tougher recession scenario. The firm said the payment card company has an excellent risk-reward valuation — even in the case of revenue growth being cut in half. “Their ability to flex peak investment expense is a powerful lever,” Wells Fargo said in a Wednesday client note. The firm maintained its overweight rating on shares, calling them a top pick. It also kept its $200 price target on shares, which implies 26.6% upside from Tuesday’s close. “We view AXP shares as quite defensive, and it’s our Top Pick. We believe their earnings would hold up better than many expect should we head into a tougher economic environment than the mild recession we assume. We also expect their affluent customer base to be more resilient than other cohorts of the consumer. As discussed further on, in our bull & bear valuation, we see much more upside potential than downside risk for the stock,” said analyst Donald Fandetti. AXP YTD mountain AXP in 2023 Wells Fargo said that, when it modeled for a stressed scenario in 2024 during which card spending declined and cut revenue from 11% to 5%, the company’s earnings per share were only pressured by about 7%. “Most investor questions are around credit, particularly on millennial account growth. While that is important, we believe it overshadows their strengthening competitive position and scale advantage, which is deepening the moat around the affluent consumer and small business,” Fandetti added. “Only 20% of revs are lending NII, as 80% is volume/fees. Their international growth (~20% of spend) also seems underappreciated as we believe it can grow at elevated rates for many years,” Fandetti continued. Shares were up 0.5% Tuesday during premarket trading. The stock is up almost 7% in 2023, outperforming the Financial Select Sector SPDR Fund (XLF), which is down 6.1% in the same period. —CNBC’s Michael Bloom contributed to this report.