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New York-based American International Group, Inc. (AIG) offers insurance products for commercial, institutional, and individual customers in North America and internationally. With a market cap of $52.1 billion, the company operates through General Insurance, Life and Retirement, and Other Operations segments. The insurance giant is expected to release its Q3 earnings after the market closes on Monday, Nov. 4.
Ahead of the event, analysts expect AIG to report a profit of $1.13 per share, down a massive 29.8% from $1.61 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections thrice over the past four quarters while missing on another occasion. Its adjusted EPS for the last reported quarter declined 33.7% year-over-year to $1.16, missing the consensus estimates by 16.6%.
For fiscal 2024, analysts expect AIG to report an adjusted EPS of $4.99, down 26.5% from $6.79 in fiscal 2023. However, in fiscal 2025, its adjusted EPS is expected to grow by a staggering 35.9% year-over-year to $6.78.
AIG stock has gained 15.9% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 23% gains and the Financial Select Sector SPDR Fund’s (XLF) 26.7% returns during the same time frame.
Shares of American International Group plunged 5.5% and kept falling for the next two trading sessions after the release of its Q2 earnings on Jul. 31. As the company has gone through a major repositioning and completed the deconsolidation of CoreBridge Financial, it recorded a $4.7 billion loss relating to the transaction. This translated into a $4 billion net loss to shareholders during the quarter, down from $1.5 billion net income reported in the year-ago quarter.
Although the market anticipated a part of the loss, AIG also missed analysts’ adjusted earnings projections by a huge margin. Moreover, its total revenues of $6.6 billion also fell short of Wall Street’s topline expectations leading to the drop in stock prices.
The consensus opinion on AIG stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 18 analysts covering the stock, 10 recommend “Strong Buy,” two advise “Moderate Buy,” and six suggest a “Hold” rating. The mean price target of $84.72 represents a potential upside of 7.9% from current price levels.
On the date of publication, Aditya Sarawgi 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.
