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Assured Guaranty Ltd (AGO)
NYSE:AGO
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Assured Guaranty
(NYSE:AGO)
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Rating:69Neutral
Price Target:
$94.00
▲(12.75% Upside)
Action:DowngradedDate:02/28/26
AGO scores solidly due to strong profitability and balance-sheet resilience, supported by an undemanding valuation (low P/E). The score is held back by historically volatile cash flow and uneven operating trends, alongside neutral-to-soft technical momentum and some ongoing credit/liquidity and capital-allocation risks highlighted on the earnings call.
Positive Factors
Market leadership in municipal insurance
A dominant 58% share of new-issue municipal insured par and >$25B wrapped provides durable competitive scale. This market leadership secures privileged deal flow, distribution advantages and pricing power, supporting steadier PVP generation and underwriting volume over the medium term.
Balance-sheet resilience
Sizable equity and moderate leverage (D/E ~0.27–0.33) give the company durable capital buffers to absorb credit losses, support large municipal and structured guarantees, and fund new initiatives. This structural strength underpins underwriting capacity and long-term claim-paying credibility.
Strategic diversification into annuity reinsurance
The Warwick Re acquisition establishes a new annuity reinsurance platform, diversifying revenue beyond municipal guarantees into recurring annuity and pension-risk flows. Over time this broadens earnings sources, leverages investment capabilities, and creates a structural growth runway independent of single-product cycles.
Negative Factors
Volatile operating cash generation
Historic swings from deeply negative OCF to a large 2025 inflow indicate inconsistent cash conversion. That variability undermines predictability for underwriting capital, buybacks and dividend policy, complicates multiyear planning and increases reliance on timing-sensitive investment and financing decisions.
Unresolved stressed credits (Thames, Brightline)
Open and potentially large problem credits (Thames; Brightline) pose lasting credit risk and potential volatility in reserves or marks. Outcomes and timing are uncertain; adverse resolutions could require incremental capital or write-downs, weakening underwriting economics and capital available for growth.
Holding-company liquidity & capital tradeoffs
Modest holding-company liquidity (~$130M total, ~$48M at AGL) limits immediate flexibility to fund opportunistic transactions. As management deploys capital into annuity reinsurance and block acquisitions, buybacks and dividends may be constrained, forcing durable allocation tradeoffs that affect growth and shareholder returns.
Assured Guaranty (AGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.75B
Dividend Yield1.5%
Average Volume (3M)337.06K
Price to Earnings (P/E)8.7
Beta (1Y)0.60
Revenue Growth7.56%
EPS Growth-38.23%
CountryUS
Employees361
SectorFinancial
Sector Strength70
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)2.32
Shares Outstanding44,948,770
10 Day Avg. Volume453,220
30 Day Avg. Volume337,060
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)0.78
Price to Sales (P/S)5.58
P/FCF Ratio16.97
Enterprise Value/Market Cap1.38
Enterprise Value/Revenue5.08
Enterprise Value/Gross Profit5.47
Enterprise Value/Ebitda6.87
Forecast
1Y Price Target
$110.00Price Target Upside31.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)6.8
Revenue Forecast (FY)$834.67M
Assured Guaranty Business Overview & Revenue Model
Company DescriptionAssured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. The company operates in two segments, Insurance and Asset Management. It offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. The company insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. It also insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, it is involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, pooled corporate obligations, financial products, and other structured finance securities. Additionally, the company offers specialty insurance and reinsurance that include life and aircraft residual value insurance transactions; and asset management services comprising investment advisory services, including management of collateralized loan obligations, and opportunity and liquid strategy funds. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.
How the Company Makes MoneyAssured Guaranty generates revenue primarily through the issuance of financial guaranty insurance policies, for which it charges premiums. These premiums are typically paid upfront and can be structured as one-time payments or ongoing annual fees. The company also earns investment income from its portfolio of invested premiums and reserves, which is a significant revenue stream. Additionally, Assured Guaranty may receive fees for structured finance transactions and advisory services. Strategic partnerships with municipalities, public authorities, and other financial institutions enhance its market presence and contribute to its earnings by broadening its client base and increasing the volume of insured transactions.
Assured Guaranty Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call emphasized multiple material accomplishments—record per-share metrics, strong adjusted operating income growth (Q4 per-share +83%, full-year per-share +28%), market leadership in new-issue municipal insurance (58% market share), a tripling of secondary market activity, solid alternative investment performance (full-year pretax alternatives +33%), completion of a strategic acquisition (Assured Life Re), and $500 million of share repurchases. Offsetting these positives are mix-driven limits on PVP and premium per par due to fewer large BBB deals, outstanding UK water (Thames) and other stressed credits (e.g., Brightline) that remain unresolved risks, modest holding company liquidity (~$130M), and potential tradeoffs between buybacks and capital deployment into the new annuity reinsurance platform. Overall, the company portrayed a strong operational and financial year with manageable but notable credit and capital-allocation risks.Q4-2025 Updates
Positive Updates
Record Per-Share and Equity Metrics
Reached new per-share highs at year-end 2025: adjusted book value $186.43, adjusted operating shareholders' equity $126.78, and shareholders' equity $125.32.
Strong Earnings Growth
Fourth quarter 2025 adjusted operating income of $109 million ($2.32 per share), an 83% increase on a per-share basis versus Q4 2024 ($66 million, $1.27). Full-year 2025 adjusted operating income of $445 million ($9.08 per share), a 28% increase on a per-share basis versus 2024 ($389 million, $7.10).
Robust New Business Production (PVP)
Present value of new business production (PVP) totaled $286 million in 2025, with $206 million from U.S. public finance and $80 million from non-U.S. public and global finance/structured transactions.
Market Leadership and Growth in Municipal Insurance
Wrapped more than $25 billion of new-issue insured municipal par (15-year high), capturing 58% of new-issue insured par sold. Guaranteed over $27 billion of municipal par in 2025, up 16% year-over-year, across more than 1,500 policies; new-issue deal count rose ~15% to over 900 transactions.
Secondary Market Expansion
U.S. public finance secondary insured par written increased more than 240% year-over-year to approximately $2 billion in 2025, generating $44 million of PVP; secondary market par more than tripled compared with prior year.
Higher-Quality Mix with AA Activity
Issued over 160 policies on underlying AA-rated credits totaling ~ $7 billion of insured par, an approximate 60% year-over-year increase in both policy count and par for AA-rated step-away transactions.
Alternative Investments Performing Well
Alternative investments fair value exceeded $1 billion (up from $884 million at 12/31/2024). Alternatives generated $160 million pretax adjusted operating income for the full year (33% year-over-year increase) and produced an inception-to-date IRR of ~13%.
Capital Return and Dividend Increase
Executed $500 million of share repurchases in 2025, buying 5.8 million shares (~12% of shares outstanding at 12/31/2024) at an average price of $85.92; remaining repurchase authorization $204 million. Distributed $69 million in dividends and approved a 12% increase in the quarterly dividend (from $0.34 to $0.38).
Litigation and Loss-Mitigation Gains
Realized a pretax gain of approximately $103 million from resolution of Lehman litigation and recorded additional pretax gains (including a $23 million Q4 loss mitigation gain). Loss mitigation actions reduced loss mitigation securities by over $400 million and removed problematic assets from the balance sheet.
Strategic Acquisition and New Business Platform
Completed acquisition of Warwick Re (renamed Assured Life Reinsurance) in January 2026 to launch an annuity reinsurance business focused on MYGAs and pension risk transfer annuities, diversifying revenue sources and creating potential synergies with existing capabilities.
Negative Updates
PVP Impacted by Business Mix Shift
PVP was constrained by the mix of business in 2025 — fewer large BBB-category transactions versus 2024 — meaning insured par skewed toward higher-rated credits that produce less premium per dollar of par and lower capital charges.
Lower Premium per Par from Higher-Rated Deals
Increased proportion of higher-rated (AA) and step-away transactions improves portfolio credit quality and reduces capital needs but yields less premium per dollar of insured par, limiting near-term premium growth.
Outstanding UK Water Exposure (Thames)
UK water portfolio exposure narrowed but Thames remains an unresolved problem exposure; company is engaged with the U.K. government and creditors' committee and expects a market-based solution but timing and outcome remain uncertain.
Brightline and Other Troubled Credits Remain Risks
Brightline remains a stressed exposure despite improving ridership and significant subordination (> $4 billion). Management is confident but the position still represents ongoing credit risk and potential volatility.
Holding Company Liquidity Constraints
Holding company liquidity is approximately $130 million (of which $48 million is at Assured Guaranty Ltd.), which may limit immediate flexibility and factors into capital allocation decisions including buybacks versus investments in the annuity reinsurance platform.
Potential Capital Allocation Tradeoffs
Expansion into annuity reinsurance and anticipated capital deployment for block acquisitions could affect the magnitude/timing of stock repurchases (the $500 million buyback target is maintained but management says buybacks will be managed in the context of competing opportunities).
Exposure to Structured/CLO Markets
Alternative investment allocations include CLO-related exposure; while management indicates losses experienced to date have been reflected in marks and that positions are in good shape, CLO/structured-market volatility remains a potential risk to returns.
Company Guidance
Management guided that Assured Guaranty is well positioned for growth in 2026, citing a robust transaction pipeline and an expectation of strong results across all three financial‑guarantee product lines, with several large transactions already closed in early 2026; they also launched the Assured Life Re annuity‑reinsurance platform (Warwick Re acquisition in Jan‑2026) and expect to deploy excess capital to write substantial new business there. Key metrics cited to support the outlook included 2025 PVP of $286 million (U.S. public finance $206M; non‑U.S. public finance + global structured finance $80M, comprised of $37M non‑U.S. and $43M structured), more than $27 billion of municipal par guaranteed (+16% YoY), over $25 billion of new‑issue par wrapped (58% of new‑issue insured par sold), >900 new‑issue deals (+15% YoY), secondary market insured par of ~$2 billion (+~240% YoY, generating $44M of PVP), alternative investments fair value >$1 billion with an inception‑to‑date IRR of ~13%, and prior capital actions that included $500M of 2025 share repurchases (5.8M shares, ~12% of 12/31/24 outstanding at an average $85.92), $69M of dividends in 2025 and a 12% increase in the quarterly dividend to $0.38; management noted remaining repurchase authorization of $204M and holding‑company liquidity of ~ $130M (≈$48M at AGL), and said they will provide an update on Assured Life Re on the Q1 call.Assured Guaranty Financial Statement Overview
Summary
Strong reported profitability (healthy recent net income and high net margins) and a generally moderate, stable leverage profile supported by sizable equity. Offsetting this, results have been volatile (uneven revenue trend, fluctuating ROE) and cash flow has been highly inconsistent historically, reducing confidence in the durability and predictability of performance.Income Statement
Profitability is strong for the industry, with consistently high net margins (roughly mid‑teens to 70%+ across 2020–2025) and solid net income in the most recent year ($503M in 2025). Revenue has been volatile—declining in 2021 and 2022, rebounding sharply in 2023, dipping again in 2024, and improving in 2025—so the growth profile is uneven. 2025 also shows missing/zero operating profit fields (EBIT/EBITDA), which reduces confidence in operating-trend quality even though bottom-line results remain healthy.76
Positive
Balance Sheet
Leverage appears moderate and generally stable, with debt-to-equity around ~0.27–0.33 in most years and improving versus the 2022 spike in total debt. Equity remains sizable ($5.7B in 2025) and assets are stable (~$12.2B in 2025), supporting balance-sheet resilience. Return on equity is positive and improved from 2024 to 2025, but it has fluctuated meaningfully over time (very low in 2022), highlighting earnings variability and the need to watch capital durability through stress periods.72
Positive
Cash Flow
Cash generation is highly uneven: operating cash flow was deeply negative in 2020–2022, then turned positive in 2023 and surged in 2025 ($766M). Free cash flow tracks operating cash flow closely (often equal), and the most recent year shows strong improvement versus 2024. However, the history of large negative cash flow and a sharp drop in 2024 ($47M) signals volatility and less predictability in cash conversion from year to year.60
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 788.00M | 814.00M | 1.01B | 684.00M | 698.00M |
| Gross Profit | 732.00M | 820.00M | 840.00M | 654.00M | 904.00M |
| EBITDA | 751.00M | 579.00M | 758.00M | 229.00M | 564.00M |
| Net Income | 503.00M | 376.00M | 739.00M | 124.00M | 389.00M |
Balance Sheet | |||||
| Total Assets | 12.18B | 11.90B | 12.54B | 16.84B | 18.21B |
| Cash, Cash Equivalents and Short-Term Investments | 6.76B | 2.46B | 8.06B | 8.04B | 9.55B |
| Total Debt | 1.70B | 1.70B | 1.69B | 6.99B | 1.67B |
| Total Liabilities | 6.39B | 6.35B | 6.77B | 11.55B | 11.71B |
| Stockholders Equity | 5.66B | 5.50B | 5.71B | 5.06B | 6.29B |
Cash Flow | |||||
| Free Cash Flow | 259.00M | 47.00M | 461.00M | -2.45B | -1.94B |
| Operating Cash Flow | 259.00M | 47.00M | 461.00M | -2.48B | -1.94B |
| Investing Cash Flow | 641.00M | 780.00M | 286.00M | 1.74B | 23.00M |
| Financing Cash Flow | -616.00M | -983.00M | -670.00M | 612.00M | 1.96B |
Assured Guaranty Technical Analysis
Negative
83.37
Price Trends
85.79
Negative
86.41
Negative
84.48
Negative
Market Momentum
-0.71
Positive
38.98
Neutral
17.69
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGO, the sentiment is Negative. The current price of 83.37 is below the 20-day moving average (MA) of 85.47, below the 50-day MA of 85.79, and below the 200-day MA of 84.48, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 38.98 is Neutral, neither overbought nor oversold. The STOCH value of 17.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGO.
Assured Guaranty Risk Analysis
Assured Guaranty disclosed 54 risk factors in its most recent earnings report. Assured Guaranty 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
Assured Guaranty Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $2.87B | 8.30 | 0.06% | ― | 8.86% | 9.51% | |
82 Outperform | $5.79B | 8.72 | 12.83% | 2.02% | 2.40% | 1.18% | |
76 Outperform | $5.53B | 9.33 | 12.35% | 1.88% | 2.78% | -0.50% | |
70 Outperform | $4.51B | 8.52 | 12.59% | 2.78% | -3.68% | 3.65% | |
69 Neutral | $3.75B | 8.74 | 8.92% | 1.50% | 7.56% | -38.23% | |
68 Neutral | $5.62B | 8.93 | 14.33% | 1.89% | 2.20% | 9.90% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
AGO
Assured Guaranty
83.37
-1.18
-1.39%
MTG
MGIC Investment
26.15
3.45
15.17%
RDN
Radian Group
33.06
2.56
8.39%
ESNT
Essent Group
58.46
4.47
8.29%
NMIH
NMI Holdings
37.71
2.42
6.86%
ACT
Enact Holdings
40.89
8.07
24.57%
Assured Guaranty Corporate Events
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Assured Guaranty Posts 2025 Financial Supplement and Audit
Positive
Feb 27, 2026
On February 27, 2026, Assured Guaranty Ltd. announced that it had posted Assured Guaranty Inc.’s December 31, 2025 financial supplement and a fixed income investor presentation for the same period on its investor relations website, providing detailed data on its balance sheet, operations and capital structure. The release also included the independent auditors’ report from PricewaterhouseCoopers LLP dated February 27, 2026, which gave an unqualified opinion that Assured Guaranty Inc.’s combined financial statements for 2023–2025 were fairly presented under U.S. GAAP, reinforcing the reliability of its reported financial position for bondholders and other stakeholders.
The most recent analyst rating on (AGO) stock is a Buy with a $110.00 price target. To see the full list of analyst forecasts on Assured Guaranty stock, see the AGO Stock Forecast page.
Business Operations and StrategyM&A Transactions
Assured Guaranty Enters Annuity Reinsurance Market with Acquisition
Positive
Jan 21, 2026
On January 21, 2026, Assured Guaranty UK Holdings, a wholly owned subsidiary of Assured Guaranty Ltd., closed the approximately $158 million cash acquisition of Warwick Company (UK) Limited, the ultimate parent of Bermuda-based life and annuity reinsurer Warwick Re Limited, after receiving required regulatory clearance from the Bermuda Monetary Authority. The transaction, which includes Warwick Re’s balance sheet, infrastructure, staff and related subsidiaries, immediately positions Assured Guaranty in the annuity reinsurance market and has led to the rebranding of Warwick Re as Assured Life Reinsurance Ltd., which will focus on fixed-term annuities and pension risk transfer annuities, supported in part by guarantees from AA-rated affiliate Assured Guaranty Re Overseas Ltd., thereby broadening the group’s product set and creating a dedicated platform for growth in annuity reinsurance under the leadership of long-time executive Dan Bevill.
The most recent analyst rating on (AGO) stock is a Buy with a $108.00 price target. To see the full list of analyst forecasts on Assured Guaranty stock, see the AGO Stock Forecast page.
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.