Analyst Randy Binner of FBR weighs in on insurance giant American International Group Inc (NYSE:AIG) after its second-quarter earnings. The company reported EPS of $0.98, above Binner’s expectation of $0.70. The beat was credited to better than expected alternative/capital market returns. However, Binner remains uncertain on the stock, reiterating a Market Perform rating, with a $53 price target.
Binner wrote, “AIG continues to execute on strategic initiatives, and this quarter appears to be a step in the right direction, despite noise around P/C reserves. The significant improvement in the accident year commercial lines loss ratio bucked the trend we have seen from other commercial writers given soft P/C market conditions. While the ability to sustain this, given the pricing environment, is still questionable to us, we believe investors will view these results favorably. We maintain our Market Perform rating, given our more cautious stance around margin improvement in a soft market, as well as above average credit risk at AIG.”
As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, Binner has a yearly average return of 8.3% and a 70% success rate. The analyst has a 7% average return when recommending AIG, and is ranked #317 out of 4,085 analysts.
TipRanks shows that out of the 13 analysts who rated AIG in the last 3 months, 54% gave a Buy rating and 46% gave a Hold rating. The average 12-month price target for the stock is $62.25, marking a 7.14% upside from current levels.