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'Inexpensive' AIG has 26% near-term upside - BMO Capital

Published 12/19/2023, 09:01 AM
Updated 12/19/2023, 09:04 AM
© Reuters.  'Inexpensive' AIG has 26% near-term upside - BMO Capital

AIG (NYSE:AIG) was upgraded to Outperform from Market Perform at BMO Capital today, with the firm raising its price target for the stock to $83 per share from $72.

This bullish call highlights what BMO views as AIG's attractive valuation and potential for strong near-term gains.

BMO Capital's revised price target implies roughly 26% upside for AIG over the next 12 months. Analysts value AIG at 1.26 times its 2025 adjusted book value on a stand-alone P&C basis.

"AIG trades at an inexpensive 0.85x multiple on a price-to-book value ex-AOCI basis, though less expensive at 8.60x BMO's ~10% below-consensus 2025 EPS estimates, which de-consolidate Life Insurance," said analysts.

"We expect the market will 'see through' potentially downwards EPS revisions in 2024 from the de-consol. We estimate our P&C stand-alone EPS estimates (stripping out the de-consol) are about in line with consensus," they added.

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