{"id":6151,"date":"2023-05-09T06:22:14","date_gmt":"2023-05-09T10:22:14","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/american-international-groups-stock-is-trading-below-its-intrinsic-value\/"},"modified":"2023-05-09T06:22:15","modified_gmt":"2023-05-09T10:22:15","slug":"american-international-groups-stock-is-trading-below-its-intrinsic-value","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=6151","title":{"rendered":"American International Group\u2019s Stock Is Trading Below Its Intrinsic Value"},"content":{"rendered":"
\n

American International Group\u2019s stock (NYSE: AIG) has lost 15% YTD, while the S&P500 is up 8% over the same period. Further, at its current price of $54 per share, it is trading 20% below its fair value of $67 \u2013 Trefis\u2019 estimate for American International Group\u2019s valuation<\/strong>. <\/strong><\/p>\n

The company outperformed the consensus estimates in the first quarter of 2023, despite a 26% y-o-y drop in the total revenues to $10.98 billion. It was mainly due to a change in net realized gains from $3.6 billion to -$1.9 billion, offsetting the 19% increase in premiums and a 9% rise in net investment income. The premiums figure mainly benefited from growth in North America group insurance, followed by a jump in the institutional insurance sub-segment of the life & retirement unit. Further, the net investment income grew due to a higher rate environment and higher available-for-sale fixed maturity sales. On the cost front, the total expense figure increased 22% y-o-y, primarily due to higher policyholder benefits and losses. Overall, the adjusted net income decreased from $4.2 billion to $23 million.<\/p>\n

The top line grew 8% y-o-y to $56.4 billion in FY2022. It was mainly due to a change in total net realized gains from $2.15 billion to $8.99 billion, partially offset by a 19% y-o-y drop in NII. On the expense front, total benefits, losses & expenses as a % of revenues decreased from 76.7% to 74.7% over the same period. It led to a 9% improvement in adjusted net income to $10.25 billion.<\/p>\n

Moving forward, we estimate the American International Group revenues<\/strong> to remain around $50.81 billion in FY2023. Additionally, AIG\u2019s adjusted net income margin is likely to decrease from 18% to around 12%, leading to an adjusted net income of $6.1 billion. This coupled with an annual EPS of $8.28 and a P\/E multiple of just above 8x will lead to a valuation of $67.<\/p>\n

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American International Group\u2019s stock (NYSE: AIG) has lost 15% YTD, while the S&P500 is up 8% over the same period. Further, at its current price of $54 per share, it is trading 20% below its fair value of $67 \u2013 Trefis\u2019 estimate for American International Group\u2019s valuation. The company outperformed the consensus estimates in the […]<\/p>\n","protected":false},"author":1,"featured_media":6152,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-6151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nAmerican International Group\u2019s Stock Is Trading Below Its Intrinsic Value | iFintechWorld<\/title>\n<meta name=\"description\" content=\"American International Group\u2019s stock (NYSE: AIG) has lost 15% YTD, while the S&P500 is up 8% over the same period. 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