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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 $45.6 billion, AIG operates through General Insurance, Life and Retirement, and Other Operations segments. The insurance giant is expected to announce its fourth-quarter earnings on Tuesday, Feb. 11.
Ahead of the event, analysts expect AIG to report a non-GAAP profit of $1.27 per share, down a staggering 29.1% from $1.79 per share reported in the year-ago quarter. While the company has surpassed Wall Street’s bottom-line estimates thrice over the past four quarters it has missed the estimates on one other occasion. Its adjusted EPS for the last reported quarter dipped 23.6% year-over-year to $1.23 while exceeding the consensus estimates by 8.9%.
For the full fiscal 2024, analysts expect AIG to report an adjusted EPS of $4.91, down 27.7% from $6.79 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to rebound 31.4% year-over-year to $6.45.
AIG stock prices have gained nearly 11% over the past 52 weeks, substantially underperforming the Financial Select Sector SPDR Fund’s (XLF) 33.4% returns and the S&P 500 Index’s ($SPX) 24.6% surge during the same time frame.
AIG stock prices dipped 1.2% during the trading session after the release of its disappointing Q3 results on Nov. 4. The company observed a significant drop in premiums collection, which led to a 7.1% year-over-year decline in total revenues to nearly $6.8 billion. Furthermore, the company struggled to manage its expenses, leading to a substantial 41% year-over-year decline in income from continuing operations before taxes, which totaled $649 million. However, the positive earnings surprise helped mitigate the decline in stock prices.
On a brighter note, AIG has intensified its share repurchase efforts. The company repurchased over $4.8 billion worth of common stock during the first three quarters of fiscal 2024, demonstrating its strong commitment to shareholders.
The consensus opinion on AIG stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 19 analysts covering the stock, 10 recommend “Strong Buy,” two advise “Moderate Buy,” and seven suggest a “Hold” rating. Its mean price target of $84.31 represents a 13% premium to current price levels.
