American International: Valuation Has Returned To Levels That Recommend Buying, Says Deutsche Bank
In a research report issued today, Deutsche Bank analyst Joshua Shanker maintained a Buy rating on American International (NYSE:AIG), and slightly raised his price target to $60 (from $59).
Shanker noted, “AIG remains a story “in progress.” Management has not demonstrated the ability to expand underwriting margins outside of the context of a 3-year industry trend. Too much of earnings stems from mark-to-market gains on derivative and bond portfolios. ROE seems likely to be below its equity cost of capital. However, we believe all these things are more than priced into a company that is, in the simplest terms, trading at 65% of book value. While an ROE of 10% is likely off in the too distant future, BVPS per share grow should continue to be in the healthy double-digits.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Shanker has a total average return of 9.7% and a 60.9% success rate. Shanker has a 21.9% average return when recommending AIG, and is ranked #401 out of 3354 analysts.