American Express (AXP) shares traded lower on Wednesday after analysts at Bank of America Securities expressed concern that the stock was trading at a premium and did not have much potential for further growth.

BofA downgraded the bank holding company to “neutral” from “buy” but maintained its price target of $263.

“Given the potential for muted billing volume growth and current premium valuation, we see limited incremental upside,” BofA analysts wrote. “While we remain positive on Amex’s execution and strategy over the long term, recent comments from retailers and travel companies suggest the spending situation is challenging even for the upscale consumer.”

Warning signals in consumer spending

The challenges for American Express could be due to concerns about consumer spending.

BofA noted that every lodging company covered by the firm has lowered its revenue per available room (RevPAR) forecasts for 2024, in part due to a warning from Delta Air Lines (DAL) that the additional seats the firm added this summer will not be filled. That’s relevant because Delta SkyMiles credit cards are issued by American Express.

This trend is also consistent with Bank of America (BofA) credit card data, which showed a 4% decline in travel spending in July compared to the same period last year, the analysts wrote.

As a result, the company expects American Express to reach the low end of its 9% to 11% revenue growth forecast in 2024. The analyst consensus for Amex’s annual revenue is $65.96 billion, net of interest expense. According to Visible Alpha consensus, this corresponds to growth of 9% from 2023.

American Express shares fell 2.8 percent in late trading Wednesday to close at $245.88, but have risen about 32 percent since the beginning of the year.