American Financial Group (AFG) AI Stock Analysis

• Market Cap: $10.91B
• Dividend Yield: 6.71%
• Average Volume (3M): 610.21K
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.54
• Revenue Growth: N/A
• EPS Growth: -10.75%
• Country: US
• Employees: 8,700
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 3.65
• Shares Outstanding: 83,403,570
• 10 Day Avg. Volume: 559,996
• 30 Day Avg. Volume: 610,214
• PEG Ratio: -2.77
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 1.40
• P/FCF Ratio: 7.47
• Enterprise Value/Market Cap: -0.40
• Enterprise Value/Revenue: -0.54
• Enterprise Value/Gross Profit: -2.22
• Enterprise Value/Ebitda: -3.59
• 1Y Price Target: $144.33
• Price Target Upside: 8.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 11.05
• Revenue Forecast (FY): $7.45B

• Rating: 74 Outperform
• Price Target: $148.00 ▲(10.99% Upside)
• Action: Upgraded Date: 02/26/26
• Date: Action: Upgraded 02/26/26

AFG scores well primarily on solid underlying financial performance (strong ROE, moderate leverage, and robust cash generation) and a favorable valuation (moderate P/E with a high dividend yield). Earnings call tone and 2026 planning assumptions are constructive, though alternative-investment weakness and elevated casualty loss/reserve risk temper the outlook; technicals add only moderate support.

Positive Factors

Underwriting Discipline & Profitability

Sustained underwriting strength and low combined ratios reflect disciplined pricing, risk selection and portfolio diversification. This underpins durable margin sustainability and reduces earnings volatility over the medium term, supporting predictable operating performance and capital generation.

Strong Balance Sheet & Ratings

Low leverage, high credit ratings and deferred debt maturities provide capital flexibility for underwriting cycles, catastrophes, and opportunistic capital returns or M&A. This foundation enhances solvency resilience and supports consistent long-term capital allocation.

Cash Generation & Capital Returns

Consistent operating and free cash flow enabling large dividends and buybacks demonstrates durable cash conversion from underwriting and investment operations. Strong cash generation supports shareholder returns while preserving flexibility for reinvestment and reserves.

Negative Factors

Alternatives Investment Weakness

Heavy exposure to lower-performing alternatives, especially multifamily, reduces investment income and float economics. Given alternatives are a sizable portfolio component, protracted underperformance can compress net investment income and annuity spreads, affecting long-term profitability.

Elevated Casualty Loss & Reserve Risk

Adverse casualty trends and conservative reserve actions signal heightened loss emergence risk in liability-exposed lines. Persistent social inflation or reserve volatility can materially depress combined ratios and require additional capital, challenging underwriting returns over multiple quarters.

Net Written Premium Softness / Competition

Declines in net written premiums and increased ceding in select segments reduce organic growth and underwriting scale. Coupled with competitive rate softening in executive liability and E&S lines, this can limit margin expansion and slow durable top-line recovery across underwriting cycles.

American Financial Group Business Overview & Revenue Model

Company Description

American 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 Money

American Financial Group generates revenue primarily through premiums collected from its property and casualty insurance operations, which account for a significant portion of its earnings. The company underwrites specialized insurance products and earns money by charging premiums that exceed the costs associated with claims and operating expenses. Additionally, AFG generates income from its annuity and life insurance segments, where it receives premiums and investment income from the policies it issues. Investment income from the company's substantial investment portfolio, which includes fixed income securities and equities, also constitutes a key revenue stream. AFG’s strategic partnerships with various agencies and brokers further enhance its market reach, while its disciplined underwriting practices help maintain profitability. Overall, the combination of insurance premiums, investment income, and prudent risk management contributes significantly to AFG's revenue model.

American Financial Group Financial Statement Overview

Summary

Financial statements reflect a fundamentally healthy insurer: solid profitability and margins, consistently strong ROE, moderate and stable leverage, and generally strong operating/free cash flow. Offsetting factors are choppy growth (including a revenue decline in 2025 vs. prior years) and year-to-year variability versus the unusually strong 2021 results.

Income Statement

Profitability remains solid for a P&C insurer, with net margins generally in the ~10–13% range in 2022–2025 and steady EBIT margins around the mid-teens. However, growth has turned choppy: revenue declined in 2025 (annual) after improving in 2022–2024, and earnings are well below the unusually strong 2021 level, pointing to a less favorable profitability environment versus peak years.

Balance Sheet

Leverage appears moderate and fairly stable, with debt-to-equity generally around ~0.35–0.43 and down slightly in 2025 versus 2024. Returns on equity are consistently strong (high-teens to low-20% in recent years), supporting balance-sheet quality. The main watch-out is equity volatility over the period (including a notable step-down after 2021), which can be meaningful for insurers depending on underwriting cycles and investment results.

Cash Flow

Cash generation is a clear positive: operating cash flow is consistently positive and free cash flow is strong, with free cash flow roughly matching net income in recent years (including 2024–2025). That said, cash flow has been volatile year-to-year (notably weaker in 2024 vs. 2023, then rebounding in 2025), and some coverage fields are reported as 0.0 in multiple years, limiting confidence in debt-carrying capacity signals from the provided dataset.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.17B	8.28B	7.73B	6.77B	6.23B
Gross Profit	3.79B	1.47B	1.35B	1.20B	1.37B
EBITDA	1.15B	1.28B	1.23B	1.31B	1.62B
Net Income	842.00M	887.00M	852.00M	898.00M	2.00B
Balance Sheet
Total Assets	32.66B	25.01B	24.62B	24.09B	24.89B
Cash, Cash Equivalents and Short-Term Investments	17.18B	1.41B	1.23B	872.00M	2.13B
Total Debt	1.82B	1.90B	1.83B	1.69B	2.20B
Total Liabilities	27.84B	20.54B	20.36B	20.04B	19.87B
Stockholders Equity	4.82B	4.47B	4.26B	4.05B	5.01B
Cash Flow
Free Cash Flow	1.53B	1.15B	1.90B	1.07B	1.56B
Operating Cash Flow	1.53B	1.15B	1.97B	1.15B	1.71B
Investing Cash Flow	-12.00M	95.00M	414.00M	-1.05B	-436.00M
Financing Cash Flow	-377.00M	-1.07B	-2.03B	-1.36B	-1.96B

American Financial Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.35
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 133.35 is above the 20-day moving average (MA) of 128.81, above the 50-day MA of 130.67, and above the 200-day MA of 128.17, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 57.99 is Neutral, neither overbought nor oversold. The STOCH value of 78.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFG.

American Financial Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KNSL	78 Outperform	$8.82B	17.59	29.25%	0.17%	18.13%	15.69%
SIGI	77 Outperform	$4.96B	11.03	13.86%	1.85%	10.98%	74.87%
THG	77 Outperform	$6.10B	9.56	20.60%	1.97%	5.26%	72.46%
RLI	75 Outperform	$5.62B	14.00	24.44%	4.05%	3.72%	-16.23%
AFG	74 Outperform	$10.91B	12.98	18.13%	6.71%	―	-10.75%
CNA	71 Outperform	$12.75B	10.04	9.03%	8.03%	5.41%	-23.52%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

American Financial Group Corporate Events

American Financial Group Adopts 2026 Executive Incentive Plan

On February 13, 2026, American Financial Group, Inc.’s Compensation Committee approved a new 2026 Senior Executive Long-Term Incentive Compensation Plan to replace a similar program that had been in place since February 23, 2016. The plan continues the company’s emphasis on long-term, performance-based cash incentives for senior executives, with bonus awards tied to pre-set performance criteria and designed to align leadership pay with shareholder interests, although no awards have yet been granted under the new framework.

The most recent analyst rating on (AFG) stock is a Hold with a $134.00 price target. To see the full list of analyst forecasts on American Financial Group stock, see the AFG Stock Forecast page.

American Financial Group Announces Special Dividend After Strong Q4

On February 3, 2026, American Financial Group reported its fourth-quarter and full-year 2025 results, highlighting strong operating performance despite slightly lower annual earnings per share compared with 2024. Fourth-quarter 2025 net earnings rose to $299 million, or $3.58 per share, from $255 million, or $3.03 per share, a year earlier, driven by a 41% year-over-year increase in underwriting profit that set a new quarterly record; core net operating earnings for the quarter climbed to $3.65 per share. For full-year 2025, net earnings were $10.08 per share versus $10.57 in 2024, with return on equity at 17.8% and core operating ROE at 18.2%. The company returned a total of $707 million to shareholders in 2025, including $334 million in special dividends and $99 million in share repurchases, and reported robust growth in book value per share plus dividends of 22.3% for the year. Reflecting continued capital strength and a shareholder-friendly capital allocation strategy, the board declared an additional one-time special cash dividend of $1.50 per share, payable on February 25, 2026 to shareholders of record on February 16, 2026.

The most recent analyst rating on (AFG) stock is a Hold with a $139.00 price target. To see the full list of analyst forecasts on American Financial Group stock, see the AFG Stock Forecast page.

American Financial Group Announces New Share Buyback Program

On December 3, 2025, American Financial Group, Inc. announced a new share repurchase program allowing the buyback of up to 5,000,000 shares of its common stock. This initiative, set to replace the existing program expiring after December 31, 2025, will run until December 31, 2030, and aims to provide the company with flexibility in managing its capital structure based on market and business conditions.

The most recent analyst rating on (AFG) stock is a Buy with a $159.00 price target. To see the full list of analyst forecasts on American Financial Group stock, see the AFG Stock Forecast page.