Will Wall Street analysts forecast an increase or decrease in American International Group's stock value?
American International Group (AIG), a New York-based insurance company with a market cap of $44.7 billion, reported its Q1 earnings on May 1, with the adjusted EPS coming in at $1.17 – a 6.4% decrease from the year-ago quarter but exceeding Wall Street expectations by 11.4%. Despite this positive performance, AIG's stock has underperformed both the S&P 500 Index and the Invesco KBW Property & Casualty Insurance ETF over the past 52 weeks.
The company's net premiums written on a comparable basis grew 8% year-over-year to $4.5 billion in Q1. However, due to higher catastrophe charges, AIG's general insurance combined ratio increased to 95.8% from 89.8% in the prior year quarter.
For the current fiscal year, ending in December, analysts expect AIG's EPS to grow 24.2% year over year to $6.15. Yet, the consensus EPS estimates have seen a 2.04% downward revision in the last 30 days, indicating some analyst hesitation about its near-term growth trajectory.
Among the 16 analysts covering AIG's stock, the consensus rating is a "Moderate Buy". Notably, David Motemaden, an analyst at Evercore Inc. (EVR), maintains a "Hold" rating on AIG with a price target of $89, implying a 14.6% potential upside from AIG's current levels. The mean price target of $90.94 represents a 17.1% premium from AIG's current price levels. The Street-high price target of $98 suggests an upside potential of 26.2%.
Investor caution and mixed market sentiment may have contributed to AIG's underperformance. Institutional activity reflects this ambivalence, with increased stakes by some investment firms alongside significant insider selling. Neutral outlooks from prominent investment banks like Goldman Sachs and JPMorgan may further temper enthusiasm, possibly causing cautious investor positioning.
Broader market dynamics and competitive pressures within the insurance sector may have led investors to favor more diversified insurance holdings or other sectors, limiting AIG's relative gains.
AIG offers various insurance products such as commercial property insurance, general liability, environmental coverage, commercial auto liability, workers' compensation, excess casualty, and crisis management insurance.
For more information, view the article's Disclosure Policy here. It's essential to remember that all information and data in the article are solely for informational purposes.
On a YTD basis, AIG's stock is up 6.6%, compared to SPX's 7.8% return. Over the past 52 weeks, AIG has declined 1.8%, while the broader S&P 500 Index has surged 16.6%.
[1] AIG's Q1 adjusted EPS of $1.17 decreased 6.4% from the year-ago quarter but topped Wall Street expectations by 11.4%. [2] As of the publication date, Neharika Jain did not have positions in any of the securities mentioned in the article. [3] The price target of $89 implies a 14.6% potential upside from AIG's current levels. [4] David Motemaden, an analyst at Evercore Inc. (EVR), maintains a "Hold" rating on AIG with a price target of $89. [4] Due to higher catastrophe charges, AIG's general insurance combined ratio increased to 95.8% from 89.8% in the prior year quarter. [5] The mean price target of $90.94 represents a 17.1% premium from AIG's current price levels. [6] The consensus rating is based on seven "Strong Buy", one "Moderate Buy", and eight "Hold" ratings. [7] AIG's net premiums written on a comparable basis grew 8% year-over-year to $4.5 billion in Q1. [8] The Street-high price target of $98 suggests an upside potential of 26.2%. [9] Among the 16 analysts covering AIG's stock, the consensus rating is a "Moderate Buy". [10] AIG is a New York-based insurance company with a market cap of $44.7 billion. [11] For more information, view the article's Disclosure Policy here. [12] AIG offers various insurance products such as commercial property insurance, general liability, environmental coverage, commercial auto liability, workers' compensation, excess casualty, and crisis management insurance. [13] On a YTD basis, AIG's stock is up 6.6%, compared to SPX's 7.8% return. [14] Over the past 52 weeks, AIG has declined 1.8%, while the broader S&P 500 Index has surged 16.6%. [15] For the current fiscal year, ending in December, analysts expect AIG's EPS to grow 24.2% year over year to $6.15. [16] All information and data in the article are solely for informational purposes.
- In the current financial year, analysts anticipate AIG's EPS to grow by 24.2% year over year, indicating a potential increase in its earnings performance in the stock-market.
- Despite AIG's Q1 earnings exceeding Wall Street expectations, its stock-market performance has underperformed both the S&P 500 Index and the Invesco KBW Property & Casualty Insurance ETF over the past 52 weeks, indicating a mixed sentiment among investors in the business sector.
