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Investing.com - Goldman Sachs has raised its price target on American International Group (NYSE:AIG) to $84.00 from $82.00 while maintaining a Neutral rating following the company’s third-quarter 2025 earnings report. Currently trading at $76.46, AIG sits below analyst targets, which range from $79 to $97. According to InvestingPro data, AIG is currently trading near its Fair Value, with analysts projecting 15% upside potential.
The firm’s analysis reflects adjustments for AIG’s EG transaction and whole account quota share, though it does not incorporate the announced minority investments in Convex and ONEX. Goldman Sachs has increased its 2026 earnings per share estimates by 3% while 2027 estimates remain unchanged. This aligns with the broader analyst sentiment, as InvestingPro notes that six analysts have recently revised their earnings expectations upward for the upcoming period.
Goldman Sachs expects approximately $1.5 billion in net premiums written for 2026 from the renewal rights deal and quota share, and has reduced projected share buybacks by $1.5 billion to support this premium growth. For 2027, the firm anticipates the quota share will contribute about $430 million in net premiums earned at an 89.5% combined ratio. Despite the projected reduction in buybacks, AIG management has been aggressively repurchasing shares, as highlighted in one of several InvestingPro Tips for this prominent insurance industry player.
The EG portfolio is projected to contribute approximately $1.1 billion of 2027 net premiums earned at a 94% combined ratio, which is about 4 percentage points higher than Goldman’s expectation for AIG’s 2027 Total Commercial combined ratio. These additions are expected to have a largely neutral impact on 2026 adjusted earnings per share.
Goldman Sachs continues to believe AIG will achieve its May 2025 Investor Day targets, including a 20%+ EPS CAGR from 2025-2027, a General Insurance expense ratio of 30% or lower by 2027, and a core operating return on equity of 11-13%.
In other recent news, American International Group, Inc. (AIG) has announced a significant development involving its executive team. John Neal, who was set to become the president of AIG effective December 1, 2025, will not be joining the company due to personal circumstances, as per a mutual agreement. Meanwhile, AIG has priced a secondary offering of Corebridge Financial shares at $31.10 per share, amounting to approximately $1 billion in gross proceeds. This offering involves 32.6 million shares and represents about 6.3% of Corebridge’s total outstanding shares. The proceeds from this transaction will go directly to AIG.
Additionally, Everest Group, Ltd. has entered into agreements to sell the renewal rights for its Global Retail Commercial Insurance business to AIG. This transaction involves approximately $2 billion in aggregate gross premiums written. The move is part of Everest’s strategy to focus on its core global Reinsurance business and Global Wholesale and Specialty Insurance operations. These developments highlight AIG’s ongoing strategic initiatives and financial maneuvers in the market.
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