American Express suffered the second biggest drop in the Dow Jones index on Tuesday morning on Wall Street, as Deutsche Bank now sees limited upside potential for the stock.

At the end of the morning, the credit card issuer's shares were down 2.6%, while the Dow lost 0.9%.

While the broker considers AmEx to be the best-positioned player in the sector and praises its long-term growth prospects, he believes that the potential for expansion in terms of valuation multiples is currently low.

It adds that Wall Street forecasts seem 'well-calibrated' at present, and considers it unlikely that targets will be revised upwards in the future.

Finally, Deutsche predicts a slight deceleration in business growth in the first quarter.

We have the impression that if its performance turns out to be weaker than expected, this will rekindle concerns about its forecasts, particularly in view of current valuation levels", it stresses.

The broker therefore downgrades its recommendation to 'hold' from 'buy', with a slightly improved price target, from $220 to $221.

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