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American Financial Group
(NYSE:AFG)
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Rating:78Outperform
Price Target:
$160.00
â–²(11.30% Upside)
Action:Reiterated
Date:08/05/26
AFG scores well on fundamental strength and the latest earnings-call momentum: strong profitability/ROE with moderate leverage, plus upbeat guidance and capital-return capacity. Valuation is supportive with a mid-teens P/E and ~5% yield. Technicals are constructive longer term but currently neutral, limiting the overall score uplift.
Positive Factors
High return on equity
Sustained near-20% operating ROE signals durable capital efficiency from underwriting and investment mix. Over the next several months this supports repeatable earnings power, funds reinvestment or buybacks, and provides a buffer versus underwriting volatility common in P&C cycles.
Negative Factors
Underwriting and revenue volatility
P&C underwriting and top-line show material variability tied to mix, reserve development and catastrophe timing. That volatility can compress margins and complicate forecasting, reducing predictability of underwriting profits and cash flow over the coming months.
Read all positive and negative factors
Positive Factors
Negative Factors
High return on equity
Sustained near-20% operating ROE signals durable capital efficiency from underwriting and investment mix. Over the next several months this supports repeatable earnings power, funds reinvestment or buybacks, and provides a buffer versus underwriting volatility common in P&C cycles.
Read all positive factors
American Financial Group (AFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.77B
Dividend Yield4.95%
Average Volume (3M)491.07K
Price to Earnings (P/E)13.5
Beta (1Y)0.48
Revenue Growth-1.65%
EPS Growth10.67%
CountryUS
Employees8,500
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)10.51
Shares Outstanding83,086,080
10 Day Avg. Volume365,874
30 Day Avg. Volume491,072
Financial Highlights & Ratios
PEG Ratio-2.76
Price to Book (P/B)2.38
Price to Sales (P/S)1.41
P/FCF Ratio8.19
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$153.67Price Target Upside6.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)11.65
Revenue Forecast (FY)$7.60B
American Financial Group Business Overview & Revenue Model
Company Description
American Financial Group, Inc. (AFG) operates as an insurance holding company, specializing in providing a broad array of property and casualty insurance solutions across the United States. Its comprehensive product portfolio encompasses various l...
How the Company Makes Money
AFG primarily makes money through its property and casualty (P&C) insurance operations by (1) underwriting income and (2) investment income. Underwriting income is generated when the premiums collected on insurance policies exceed the costs to ser...
American Financial Group Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call emphasized multiple strong financial and operating highlights: record pretax P&C operating income, a 32% increase in core net operating earnings, double-digit improvement in investment performance, premium growth across most businesses, solid segment combined ratios and sustained capital returns (dividends, buybacks) with an anticipated $125 million gain on a property sale. Headwinds disclosed are meaningful but manageable: localized underwriting challenges (notably California workers' comp), mix-driven increases in loss and expense ratios in some segments, crop seasonality and competitive pressure from MGAs. Management is maintaining a conservative reserving posture for social-inflation-exposed lines while investing in AI and pursuing disciplined growth. On balance, the positive financial momentum, capital flexibility and broad-based premium and investment gains materially outweigh the identified challenges.Positive Updates
Strong Core Earnings and ROE
Core net operating earnings of $2.82 per share in Q2 2026, a 32% increase year-over-year, producing an annualized core operating return on equity of 19.2%.
Negative Updates
Uptick in Underlying Loss Ratios in Specialty Casualty
Specialty Casualty accident-year trends and underlying loss ratios have increased (segment calendar-year combined ratio 94.5%, up 0.6 points year-over-year); management attributes part of the uptick to mix (growth in higher-loss businesses) and remains conservative on reserve picks due to social inflation exposure.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Core Earnings and ROE
Core net operating earnings of $2.82 per share in Q2 2026, a 32% increase year-over-year, producing an annualized core operating return on equity of 19.2%.
Read all positive updates
Company Guidance
AFG guided that it expects to recognize a Q3 2026 pretax core operating gain of approximately $125 million (about $1.20/share) on the pending sale of Charleston Harbor, and said operations should continue to generate significant excess capital through the remainder of 2026 to fund acquisitions, special dividends or share repurchases; in Q2 it returned nearly $100 million to shareholders (including $26 million of buybacks and a $0.88/share regular quarterly dividend) and reported core net operating earnings of $2.82/share (up 32% YOY) with an annualized core operating ROE of 19.2%. Other metrics cited: $17.1 billion investment portfolio; P&C net investment income +23% YOY in Q2; ~2/3 of the portfolio in fixed maturities yielding ~5.5% with portfolio duration of 3.1 years; alternative investments annualized ~7.1% in Q2 (vs 1.2% a year earlier) with a long‑term target of 10%+; specialty P&C combined ratio 91.5% in Q2 (vs 93.1) with 3.4 points favorable prior‑year development (vs 0.7) and catastrophes adding 1.8 points (vs 2.3); gross/net written premiums +7%/+6% YOY; Property & Transportation combined ratio 90.3% (vs 95.2) with GWP/NWP +8%/+5% and renewal rates +8%; Specialty Casualty combined ratio 94.5% with GWP/NWP +5%/+6% and renewal rates excl. workers’ comp ≈+4% (incl. WC ≈+2%); Specialty Financial combined ratio 85.6% with GWP/NWP +10% and renewal pricing down <1%; workers’ comp pricing ≈‑2% in Q2 (≈‑3% YTD), CA = 14% of comp premium and underperforming; and book value per share excluding AOCI plus dividends +5% for the quarter.American Financial Group Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.11B | 8.12B | 8.28B | 7.73B | 6.77B | 6.23B |
| Gross Profit | 1.47B | 1.43B | 1.47B | 1.35B | 1.20B | 1.37B |
| EBITDA | 1.29B | 1.24B | 1.28B | 1.23B | 1.31B | 1.62B |
| Net Income | 879.00M | 842.00M | 887.00M | 852.00M | 898.00M | 2.00B |
Balance Sheet | ||||||
| Total Assets | 32.35B | 32.64B | 25.01B | 24.62B | 24.09B | 24.89B |
| Cash, Cash Equivalents and Short-Term Investments | 2.12B | 2.44B | 1.41B | 1.23B | 872.00M | 2.13B |
| Total Debt | 1.82B | 1.82B | 1.90B | 1.83B | 1.69B | 2.20B |
| Total Liabilities | 27.68B | 27.82B | 20.54B | 20.36B | 20.04B | 19.87B |
| Stockholders Equity | 4.68B | 4.82B | 4.47B | 4.26B | 4.05B | 5.01B |
Cash Flow | ||||||
| Free Cash Flow | 1.57B | 1.40B | 1.15B | 1.90B | 1.07B | 1.56B |
| Operating Cash Flow | 1.67B | 1.53B | 1.15B | 1.97B | 1.15B | 1.71B |
| Investing Cash Flow | -1.47B | -835.00M | 95.00M | 414.00M | -1.05B | -436.00M |
| Financing Cash Flow | -117.00M | -377.00M | -1.07B | -2.03B | -1.36B | -1.96B |
American Financial Group Technical Analysis
Positive
143.76
Price Trends
137.00
Positive
133.17
Positive
131.33
Positive
Market Momentum
1.28
Positive
50.48
Neutral
31.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFG, the sentiment is Positive. The current price of 143.76 is above the 20-day moving average (MA) of 141.59, above the 50-day MA of 137.00, and above the 200-day MA of 131.33, indicating a neutral trend. The MACD of 1.28 indicates Positive momentum. The RSI at 50.48 is Neutral, neither overbought nor oversold. The STOCH value of 31.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFG.
American Financial Group Risk Analysis
American Financial Group disclosed 28 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.62B | 12.87 | 24.37% | 4.08% | 10.29% | 35.39% | |
79 Outperform | $8.12B | 14.39 | 29.06% | 0.24% | 15.82% | 28.42% | |
78 Outperform | $11.77B | 13.48 | 18.76% | 4.88% | -1.65% | 10.67% | |
78 Outperform | $5.65B | 11.73 | 13.87% | 1.80% | 7.30% | 32.16% | |
76 Outperform | $8.10B | 10.96 | 21.22% | 1.72% | 5.57% | 38.39% | |
74 Outperform | $14.19B | 11.71 | 11.99% | 7.23% | 4.05% | 35.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
AFG
American Financial Group
140.60
19.39
15.99%
CNA
CNA Financial
52.96
9.09
20.72%
RLI
RLI
61.82
-0.81
-1.29%
SIGI
Selective Insurance Group
96.63
19.18
24.77%
THG
Hanover Insurance
228.04
57.99
34.10%
KNSL
Kinsale Capital Group
362.82
-81.13
-18.28%
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.