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New York-based American International Group, Inc. (AIG) offers insurance products for commercial, institutional, and individual customers. Valued at a market cap of $44.7 billion, the company’s offerings include commercial and industrial property insurance, such as business interruption and package insurance, as well as general liability, environmental coverage, commercial auto liability, workers' compensation, excess casualty, and crisis management insurance, among others.
This insurance company has lagged behind the broader market over the past 52 weeks. AIG has declined 1.8% over this time frame, while the broader S&P 500 Index ($SPX) has surged 16.6%. Moreover, on a YTD basis, the stock is up 6.6%, compared to SPX’s 7.8% return.
Narrowing the focus, AIG has also underperformed the Invesco KBW Property & Casualty Insurance ETF’s (KBWP) 7.3% uptick over the past 52 weeks. However, it has outpaced the ETF’s 1.1% gain on a YTD basis.
AIG delivered its Q1 results on May 1, and its shares surged 3.5% in the following trading session. The company's adjusted EPS of $1.17 decreased 6.4% from the year-ago quarter, but topped Wall Street expectations by a notable margin of 11.4%. Moreover, its net premiums written on a comparable basis grew 8% year-over-year to $4.5 billion. However, due to higher catastrophe charges, its 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. The company’s earnings surprise history is mixed. It exceeded the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 16 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on seven “Strong Buy,” one "Moderate Buy,” and eight “Hold” ratings.
The configuration has remained consistent over the past three months.
On Jul. 15, Evercore Inc. (EVR) analyst David Motemaden maintained a “Hold” rating on AIG with a price target of $89, implying a 14.6% potential upside from the current levels.
The mean price target of $90.94 represents a 17.1% premium from AIG’s current price levels, while the Street-high price target of $98 suggests an upside potential of 26.2%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
