Shares of American Express could come under pressure as more consumers cut back on spending because of inflation, according to Morgan Stanley. Analyst Betsy Graseck downgraded shares of American Express to equal weight from overweight, and cut the price target, saying in a Tuesday note that rising prices are starting to hit more wealthy consumers. "We expect high-end consumer spending to slow down as inflation takes a larger share of household disposable income," Graseck wrote. Morgan Stanley slashed its price target on American Express by nearly 36% to $143 from $223. The new target implies upside of just 1.7% from Monday's close. The analyst believes American Express, which serves higher-income consumers more so than other credit card companies, will get hit by rising inflation. Graseck cited a recent Morgan Stanley survey that showed more affluent consumers are worrying about inflation, and plan to cut back on discretionary spending because of rising prices. The analyst cut forecasts of discount revenue growth to 19.8% and 9.8% in 2022 and 2023, compared to previous expectations of 22% and 13.4% over the same time periods. EPS forecasts were also dropped by 5.5% in 2022, and 14.7% in 2023. Morgan Stanley also downgraded shares of Capital One to equal weight from overweight, saying that subprime consumer loan losses from rising inflation will particularly hit the credit card company. Shares of American Express and Capital One each declined more than 2% in Tuesday premarket trading. —CNBC's Michael Bloom contributed to this report.