Analyst Bob Huang from Morgan Stanley maintained a Hold rating on American International Group (AIG – Research Report) and keeping the price target at $85.00.
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Bob Huang has given his Hold rating due to a combination of factors that highlight both strengths and challenges within American International Group’s (AIG) reserve position. AIG is experiencing improvements in its overall reserves, driven by favorable developments in Workers Compensation (WC) and short-tailed lines, despite industry-wide concerns about social inflation impacting reserves. The company’s diversified business model supports a strong reserve position, with long-tail casualty lines performing better than the industry average.
However, there are areas of concern that justify a Hold rating. AIG’s Other Liability Occurrence (OLOC) line, although adverse, performed better than expected given its exposure. Additionally, while AIG’s reserves are well-protected by favorable developments in certain segments, there are adverse reserve charges in Commercial Auto Liabilities (CAL) and Commercial Multi-Peril (CMP) lines. These mixed results, along with the ongoing pressures from social inflation in the property and casualty industry, contribute to the Hold rating as AIG navigates these challenges.
In another report released on June 5, Evercore ISI also maintained a Hold rating on the stock with a $89.00 price target.