BofA Securities analysts increased their price target for American International Group (NYSE:AIG) to $84 from $82, maintaining a Neutral rating on the stock. The analysts explained that the previous valuation of AIG was based on a sum-of-the-parts approach, considering the General Insurance and Life businesses separately along with the value of the deferred tax asset (DTA). Following consolidation, AIG will now be valued similarly to its large-cap P&C peers, using a forward P/E multiple of 10.6x for 2025 earnings to determine a 12-month price target of $84. This valuation approach assumes the DTA will be exhausted by the end of 2026.
The analysts acknowledged that AIG might traditionally trade at a discount compared to peers due to its trading history, shrinking reserve base, and slower premium growth. However, they believe that AIG’s ongoing share repurchase efforts provide unique price support that is not observed in peer stocks, which should positively influence its near-term valuation.