AIG's Resilient Hyperinflation Strategy Leads To Analyst Upgrade
Portfolio Pulse from Priya Nigam
American International Group Inc (NYSE:AIG) has seen its shares rise by nearly 20% over the past six months, attributed to its effective strategy in managing reserves during hyperinflationary conditions. BMO Capital Markets analyst Michael Zaremski upgraded AIG's rating from Market Perform to Outperform and increased the price target from $72 to $83. Zaremski highlights AIG's lower insurance policy limits, higher reliance on reinsurance, and a better loss ratio margin trend compared to peers as key factors. The company's expense ratio improvement is also seen as a driver for sustainable double-digit RoE, especially after fully separating from Corebridge. AIG's stock was up 6.9% to $67.31 at the time of publication.
December 19, 2023 | 4:49 pm
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AIG's stock has been upgraded by BMO Capital Markets analyst Michael Zaremski from Market Perform to Outperform with a price target increase from $72 to $83, reflecting confidence in the company's hyperinflation strategy and reinsurance reliance.
The upgrade by BMO Capital Markets is a strong positive signal to the market, indicating that AIG's strategy to manage hyperinflation and its reliance on reinsurance is working effectively. The increase in price target suggests that the analyst sees further upside potential for the stock. Historically, analyst upgrades can lead to short-term price increases as they often influence investor sentiment and can lead to increased buying pressure.
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