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On Wednesday, Keefe, Bruyette & Woods analysts maintained a positive outlook on American International Group (NYSE:AIG) stock, reiterating their Outperform rating and a $90.00 price target. The firm’s analysis of AIG’s year-end 2024 Generally Accepted Accounting Principles (GAAP) loss reserve triangles suggests that the company’s net reserves at the end of 2024 were higher than necessary by approximately $2.06 billion. This figure is a slight decrease from the estimated $2.38 billion overstatement in year-end 2023.
The analysts’ review led them to uphold their earnings per share (EPS) estimates for 2025 and 2026 at $6.25 and $7.85, respectively. These projections include anticipated prior-year reserve releases of $341 million for 2025 and $357 million for 2026, gross of associated return premiums. In 2024, AIG reported releasing $368 million of prior-year reserves. The company has demonstrated strong profitability with a diluted EPS of $3.35 in the last twelve months and maintains a healthy dividend yield of 1.91%.
The sustained reserve releases expected in 2025 and 2026 are a key factor in the analysts’ positive rating. They believe that AIG will continue to exhibit net favorable reserve development. Additionally, they anticipate that the company will make progress in core underwriting margins, experience solid premium growth, and pursue aggressive capital return strategies.
These factors collectively contribute to the analysts’ confidence that AIG stock will outperform in the market over the next 12 months and beyond. The $90.00 price target is based on 11.5 times the firm’s estimated 2026 EPS for AIG. Keefe, Bruyette & Woods’ stance indicates they see a strong future for AIG’s financial performance and stock value.
In other recent news, American International Group (AIG) has seen a flurry of activity regarding its stock ratings and financial outlook. HSBC upgraded AIG shares from Hold to Buy, increasing the price target to $93, reflecting optimism about the company’s strategic actions and nearing completion of its corporate efficiency program, AIG Next (LON:NXT). Keefe, Bruyette & Woods also raised their price target for AIG to $90, maintaining an Outperform rating, citing AIG’s solid premium growth and aggressive capital return strategy as key factors. Meanwhile, RBC Capital Markets reiterated an Outperform rating with a price target of $87, highlighting AIG’s robust share buybacks and growth opportunities in core business areas.
BMO Capital Markets adjusted its outlook on AIG, maintaining a Market Perform rating while raising the price target to $83. This adjustment is based on AIG’s improved return on equity projections and strategic financial maneuvers. Analysts at BMO noted that AIG’s management is considering mergers and acquisitions as part of its capital strategy. Despite some challenges, such as increased market competition, AIG’s ongoing efforts to streamline operations have been recognized positively by analysts.
AIG’s recent earnings report has also played a significant role in these evaluations, with Keefe, Bruyette & Woods noting the company’s progress in underwriting margins and earnings growth. Overall, the recent developments suggest a cautiously optimistic outlook from analysts regarding AIG’s future performance and strategic initiatives.
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