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American Financial Group (AFG)
NYSE:AFG
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American Financial Group
(NYSE:AFG)
Rating:66Neutral
Price Target:
$132.00
â–²(6.61%Upside)
American Financial Group (AFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.25B
Dividend Yield7.82%
Average Volume (3M)458.91K
Price to Earnings (P/E)12.9
Beta (1Y)0.54
Revenue Growth3.76%
EPS Growth-9.12%
CountryUS
Employees8,700
SectorFinancial
Sector Strength76
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)1.81
Shares Outstanding83,517,980
10 Day Avg. Volume533,046
30 Day Avg. Volume458,906
Financial Highlights & Ratios
PEG Ratio-0.77
Price to Book (P/B)2.88
Price to Sales (P/S)0.00
P/FCF Ratio10.95
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue0.43
Enterprise Value/Gross Profit2.89
Enterprise Value/Ebitda3.12
Forecast
1Y Price Target
$131.33Price Target Upside6.07% Upside
Rating ConsensusHold
Number of Analyst Covering3
American Financial Group Business Overview & Revenue Model
Company DescriptionAmerican Financial Group, Inc., an insurance holding company, provides specialty property and casualty insurance products in the United States. It offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers' compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio.
How the Company Makes MoneyAmerican Financial Group generates revenue primarily through the underwriting and sale of insurance policies within its Property and Casualty Insurance and Annuity segments. In the Property and Casualty Insurance segment, AFG earns premiums from policyholders in exchange for coverage against various risks. The company also invests the premiums collected, generating additional income through returns on its investment portfolio. In the Annuity segment, AFG earns money from the sale of fixed and indexed annuities, managing the invested assets to meet future payout obligations while generating investment income. Key factors contributing to AFG's earnings include effective risk assessment, pricing strategies, and a diversified portfolio that mitigates exposure to market fluctuations.
American Financial Group Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -4.73%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. AFG demonstrated strong shareholder returns and strategic capital management, alongside successful asset sales. However, these were offset by decreased earnings, elevated catastrophe losses, and challenges in investment returns and underwriting. The company's ability to navigate economic and insurance cycles remains a strength.Q1-2025 Updates
Positive Updates
Shareholder Returns
AFG returned over $290 million to shareholders during Q1 2025 through a combination of regular dividends, special dividends, and share repurchases.
Investment Portfolio Performance
AFG's net investment income from its property and casualty operations increased by 6% year-over-year due to higher interest rates and balances of invested assets.
Capital Deployment Opportunities
The company expects to generate significant excess capital throughout 2025, allowing for acquisitions, special dividends, or share repurchases.
Sale of Charleston Harbor Resort & Marina
AFG announced agreements to sell Charleston Harbor Resort & Marina, expecting to recognize an after-tax core operating gain of approximately $100 million or $1.20 per share.
Specialty Casualty Group Achievements
The Specialty Financial Group achieved an 87 combined ratio for Q1 2025, only 0.4 points higher than the 2024 period, demonstrating excellent underwriting margins.
Negative Updates
Decreased Core Net Operating Earnings
AFG reported core net operating earnings of $1.81 per share in Q1 2025, a decrease from the previous year due to lower P&C insurance underwriting profit and lower returns in the alternative investment portfolio.
Elevated Catastrophe Losses
The combined ratio for specialty P&C insurance was 94 in Q1 2025, up from 90.1 in 2024, driven by higher catastrophe losses from California wildfires.
Decrease in Premiums
First quarter 2025 gross and net written premiums were down 2% and 1% respectively, compared to the same period in 2024.
Lower Alternative Investment Returns
The annualized return on alternative investments in AFG's P&C portfolio was approximately 1.8% for Q1 2025, compared to 9% in the prior year.
Challenges in Social Inflation-Exposed Businesses
AFG faced challenges in its social inflation-exposed businesses, with conservative adjustments made to pricing and underwriting.
Company Guidance
During the American Financial Group's 2025 first-quarter earnings call, key metrics were highlighted to provide guidance amidst a challenging economic environment. The company reported core net operating earnings of $1.81 per share, reflecting a year-over-year decrease due to lower underwriting profit and returns in their alternative investment portfolio. AFG's investment portfolio, valued at $16 billion, saw a 6% increase in net investment income, excluding alternative investments, primarily due to higher interest rates. However, property and casualty net investment income, including alternative investments, was down by approximately 17% compared to the previous year. Catastrophe losses added 4.5 points to the combined ratio, compared to 2.3 points in the same quarter last year, primarily due to California wildfires. The company's specialty property and casualty businesses reported a combined ratio of 94, up from 90.1 in 2024, with a 2% drop in gross written premiums and a 1% decrease in net written premiums year-over-year. Despite these challenges, average renewal pricing in the P&C group increased by approximately 7%, and the company returned over $290 million to shareholders, including share repurchases and dividend payments. Additionally, AFG expects to recognize an after-tax gain of approximately $100 million ($1.20 per share) from the sale of Charleston Harbor Resort & Marina, scheduled to close in the third quarter of 2025. The company maintains a focus on disciplined underwriting and capital management, projecting continued opportunities for growth and value creation throughout 2025.American Financial Group Financial Statement Overview
Summary
American Financial Group shows strong revenue growth and effective cash flow management. However, recent declines in operational efficiency and free cash flow suggest areas of concern. The balance sheet remains stable with conservative debt usage and effective equity utilization.Income Statement
American Financial Group shows a solid growth trajectory with a consistent increase in total revenue from $6.55 billion in 2021 to $8.32 billion in 2024. The net profit margin has improved over the years, reaching 10.65% in 2024. However, the decline in EBIT and EBITDA margins in 2024 indicates a possible challenge in maintaining operational efficiency.78
Positive
Balance Sheet
The company's balance sheet is stable with a healthy debt-to-equity ratio of 0.33 in 2024, reflecting a conservative leverage position. The equity ratio has slightly decreased over time, reaching 14.48% in 2024, indicating moderate reliance on liabilities. Return on equity is strong at 19.86%, showcasing effective use of shareholders' equity.72
Positive
Cash Flow
American Financial Group maintains a robust cash flow position with significant operating cash flow of $1.15 billion in 2024. The free cash flow remains strong, and the operating cash flow to net income ratio is favorable at 1.30, indicating effective cash generation from operations. However, a declining trend in free cash flow compared to previous years suggests potential challenges in maintaining cash generation levels.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.12B | 29.00M | 7.73B | 7.04B | 6.55B | 7.91B | Gross Profit |
| 4.26B | 0.00 | 7.73B | 7.04B | 6.55B | 7.91B | EBIT |
| 858.00M | 1.15B | 1.20B | 1.21B | 2.14B | 655.00M | EBITDA |
| 650.00M | 1.20B | 1.23B | 1.31B | 1.62B | 726.00M | Net Income Common Stockholders |
| 799.00M | 887.00M | 852.00M | 898.00M | 1.08B | 732.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.28B | 1.41B | 1.75B | 10.97B | 12.49B | 46.02B | Total Assets |
| 30.29B | 30.84B | 29.79B | 28.83B | 28.94B | 73.57B | Total Debt |
| 1.48B | 1.48B | 1.48B | 1.50B | 1.96B | 1.96B | Net Debt |
| 200.00M | 69.00M | 250.00M | 624.00M | -167.00M | -847.00M | Total Liabilities |
| 25.90B | 26.37B | 25.53B | 24.78B | 23.93B | 66.78B | Stockholders Equity |
| 4.39B | 4.47B | 4.26B | 4.05B | 5.01B | 6.79B |
| Cash Flow | Free Cash Flow | ||||
| 1.43B | 1.15B | 1.97B | 1.07B | 1.56B | 1.84B | Operating Cash Flow |
| 1.39B | 1.15B | 1.97B | 1.15B | 1.71B | 2.18B | Investing Cash Flow |
| 122.00M | 95.00M | 414.00M | -1.05B | -436.00M | -1.56B | Financing Cash Flow |
| -1.47B | -1.07B | -2.03B | -1.36B | -1.96B | -123.00M |
American Financial Group Technical Analysis
Negative
123.82
Price Trends
124.92
Negative
125.08
Negative
127.82
Negative
Market Momentum
-0.32
Positive
45.50
Neutral
40.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFG, the sentiment is Negative. The current price of 123.82 is above the 20-day moving average (MA) of 123.50, below the 50-day MA of 124.92, and below the 200-day MA of 127.82, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 45.50 is Neutral, neither overbought nor oversold. The STOCH value of 40.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFG.
American Financial Group Risk Analysis
American Financial Group disclosed 27 risk factors in its most recent earnings report. American Financial Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Financial Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $8.02B | 9.98 | 15.43% | 1.73% | 6.76% | 54.56% | |
79 Outperform | $6.00B | 13.91 | 15.74% | 2.16% | 3.09% | 168.29% | |
78 Outperform | $10.74B | 26.54 | 29.42% | 0.15% | 23.14% | 14.86% | |
72 Outperform | $6.56B | 23.53 | 17.99% | 0.89% | 9.18% | -16.06% | |
70 Outperform | $12.21B | 13.74 | 8.98% | 4.08% | 6.34% | -28.19% | |
66 Neutral | $10.25B | 12.89 | 18.51% | 7.82% | 3.76% | -9.12% | |
64 Neutral | $12.73B | 9.92 | 7.90% | 78.88% | 12.06% | -7.95% |
* Financial Sector Average
Performance Comparison
AFG
American Financial Group
123.82
5.86
4.97%
AXS
Axis Capital
102.58
33.00
47.43%
CNA
CNA Financial
45.29
4.28
10.44%
RLI
RLI
72.18
3.62
5.28%
THG
Hanover Insurance
168.09
47.11
38.94%
KNSL
Kinsale Capital Group
476.07
83.99
21.42%
American Financial Group Corporate Events
M&A TransactionsFinancial Disclosures
American Financial Group Sells Charleston Harbor Resort
Positive
Apr 2, 2025
On March 31, 2025, American Financial Group announced that its subsidiary reached agreements to sell the Charleston Harbor Resort & Marina in Charleston, South Carolina. The transaction, expected to close in the second or third quarter of 2025, could result in a net after-tax gain of approximately $100 million for AFG, impacting its financial performance positively.
Executive/Board ChangesShareholder Meetings
American Financial Group Elects New Board Members
Neutral
Feb 20, 2025
On February 19, 2025, American Financial Group announced the election of Craig Lindner Jr. and David L. Thompson Jr. to its Board of Directors, highlighting their extensive experience in real estate and insurance, respectively. Concurrently, James E. Evans announced his decision not to seek re-election at the 2025 Annual Meeting, although he will continue to serve as an Executive Consultant, ensuring a seamless transition and continued strategic guidance for the company.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.