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AIG’s Hold Rating: Revised Financial Outlook and Conservative Capital Management

AIG’s Hold Rating: Revised Financial Outlook and Conservative Capital Management

Michael Zaremski, an analyst from BMO Capital, maintained the Hold rating on American International Group (AIGResearch Report). The associated price target remains the same with $83.00.

Michael Zaremski has given his Hold rating due to a combination of factors influencing AIG’s financial outlook. One significant reason is the revised forecast for AIG’s return on equity, which is now expected to be around 11.6% by 2027, a decrease from the previous estimate of 13%. This adjustment is accompanied by a reduction in the expected earnings per share for 2026 and 2027, primarily due to a decrease in projected share repurchases.
Additionally, the decision to lower stock repurchase levels reflects a more conservative approach to capital management, considering AIG’s risk-based capital levels and the need to support new sales growth. AIG’s capital conservatism, particularly in its Japanese subsidiaries, also plays a role in this rating. Furthermore, the target price for AIG’s stock is set at a discount compared to its peer Chubb, reflecting a less favorable valuation multiple. These factors collectively contribute to the Hold rating, indicating a cautious stance on AIG’s future performance.

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