American International Stock: Is Wall Street Bullish or Bearish?

American International Group, Inc. (AIG), boasting a market cap of $47.8 billion, is a global insurance organization. The New York-based company provides a wide range of insurance and financial services through a multichannel distribution network, including property casualty insurance, life insurance, and retirement solutions.

Shares of this insurer have slightly underperformed the broader market over the past 52 weeks. AIG has surged 17.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 18.5%. In 2024, AIG saw a YTD increase of 6.2%, lagging behind the SPX's 12.1% rise.

Zooming in further, AIG has also fallen short of the US Insurance iShares ETF (IAK), which has delivered a robust 29.3% return over the past year and an 18% gain on a YTD basis.

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American International has underperformed largely due to a decrease in premiums from its North American insurance segment and a reduction in net realized gains, which have affected overall profitability. In addition, broader macroeconomic challenges, such as high oil prices and elevated interest rates, have impacted AIG's performance relative to its peers. Furthermore, the stock dropped almost 5.5% following its Q2 earnings release on Jul. 31 due to a weaker-than-expected increase in profit, impacted by lower underwriting income and higher catastrophe losses.

For the current fiscal year, ending in December, analysts expect AIG's EPS to decline 7.7% year over year to $6.27. The company's earnings surprise history is mixed. It exceeded the consensus forecast in three of the past four quarters while missing on one occasion.

Out of the 17 analysts assessing AIG stock, the consensus rating is "Moderate Buy." That's based on nine "Strong Buy" ratings, two "Moderate Buys," and six "Holds.”

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This configuration has remained steady over the past three months.

On Aug. 2, Piper Sandler's analyst Paul Newsome assigned a "Buy" rating to American International, with a price target of $86. This new target implies a potential upside of around 19.5% from the current levels.

The mean price target of $85.23 represents a premium of 18.4% to AIG's current levels. However, the Street-high price target of $96 suggests that the stock could rally as much as 33.4%.

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On the date of publication, Sohini Mondal 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.