Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Keefe, Bruyette & Woods lowered its price target on American Financial (NYSE:AFG) to $124.00 from $127.00 while maintaining a Market Perform rating.
The price target adjustment follows American Financial’s second-quarter 2025 earnings report and conference call. KBW’s new target represents 10.5 times the firm’s 2026 estimated earnings per share. Notably, InvestingPro data shows the company has maintained dividend payments for 40 consecutive years, demonstrating strong financial stability.
KBW reduced its 2025 and 2026 earnings per share estimates to $9.90 and $11.85 from $10.10 and $12.05, respectively. The firm also initiated a 2027 earnings per share estimate of $12.40.
The revised estimates incorporate American Financial’s second-quarter 2025 performance, which fell below KBW’s expectations despite beating consensus estimates. The firm is assuming higher core loss ratios and lower net investment income, partially offset by faster premium growth, larger reserve releases, and lower catastrophe and expense ratios.
KBW noted that while investors should benefit from American Financial’s solid underwriting expertise over the long term, limited reserve releases and high casualty loss picks will likely restrict upside potential in the near term. InvestingPro analysis reveals the company maintains a GOOD overall financial health score, with liquid assets exceeding short-term obligations and revenue growth of 4.6% in the last twelve months.
In other recent news, American Financial Group reported its second-quarter earnings for 2025, with an earnings per share (EPS) of $2.14, slightly surpassing the forecast of $2.13. The company also reported revenue of $1.92 billion, significantly exceeding the expected $1.73 billion. These results indicate a strong performance for the quarter. Additionally, Jefferies raised its price target for American Financial to $130 from $125 while maintaining a Hold rating on the stock. The research firm expects the company to focus on maintaining margins rather than pursuing growth in the near term. These developments provide investors with insights into the company’s financial health and strategic direction.
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