AIG
American International Group, Inc.$78.72
Hold
Target $88.34
Report: Mar 09, 2026Financial Services • Insurance - Diversified • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$78.72+12.2%
Rec: HoldConviction: Medium
Entry Target
$67.95
(14% below current)
Fair Value
$88.34
(12% above current)
Stop Loss
$63.00
(20% below current)
Position Size
Starter
Time Horizon
Long-Term (3+ Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$88.07
52 Week Low$71.25
Avg. 3 Month Volume4.75M
Efficiency
LTM Gross Margin47.1%
LTM EBITDA Margin28.9%
LTM EBIT Margin16.0%
LTM Operating Margin15.9%
LTM ROA1.9%
LTM ROE7.5%
LTM ROIC2.6%
LTM ROCE2.6%
Capital Structure
Market Cap (MM)$40.4B
Enterprise Value (MM)$48.3B
Shares Outstanding540.78M
Total Debt (MM)$9.19B
Cash & Equivalents (MM)$1.27B
LTM Net Debt (MM)$7.92B
LTM Net Debt/EBITDA1.0x
Growth
TTM Rev. Growth-19.0%
Last 3-Yr Rev. CAGR-22.0%
Last 3-Yr EBITDA CAGR-26.2%
Last 3-Yr EPS CAGR-25.2%
Valuation
Street Target Price$85.75
LTM EV/Revenue1.8x
LTM EV/Gross Profit3.8x
LTM EV/EBIT11.3x
LTM EV/EBITDA6.2x
LTM P/E13.0x
LTM EV/FCF14.6x
LTM P/FCF12.2x
LTM P/TB0.3x
LTM P/B1.0x
Dividend Yield2.3%
Payout Ratio31.9%
Executive SummarySituation: Current price is $78.72 versus fair value $88.34 (12.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Final Corebridge Deconsolidation: The sale of the remaining 15.5% stake in Corebridge Financial will provide a final multi-billion dollar liquidity event. Bear case centers on Social Inflation and Casualty Reserve Inadequacy: Rising litigation costs and 'nuclear verdicts' could force AIG to strengthen reserves in its large casualty book, leading to a permanent impairment of underwriting margins. Conclusion: Recommendation is Hold with Starter sizing and Long-Term (3+ Years) horizon.
Bull Case
AIG's accident year combined ratio of 88.3% demonstrates elite underwriting discipline; the $1.0 billion 2026 buyback authorization continues a 'cannibal' strategy that has historically delivered a 62.1% net yield; GenAI initiatives are expected to drive the expense ratio below 30% by 2027.
Bear Case
Revenue declined 1.7% YoY to $26.8 billion, suggesting difficulty in finding organic growth; net income remains highly sensitive to investment portfolio volatility; social inflation and rising litigation costs pose a latent threat to casualty reserves.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Final Corebridge Deconsolidation: The sale of the remaining 15.5% stake in Corebridge Financial will provide a final multi-billion dollar li...
Near-Term (0-6 months)Impact: Moderate
Everest/Convex Accretion: The first full year of results from the Everest renewal rights and Convex equity stake will demonstrate the earnin...
Long-Term (18+ months)Impact: Moderate
AIG is at a critical juncture as it transitions leadership and completes its four-year restructuring, making the current price a vital basel...
Primary Risks
Concern: Medium
Social Inflation and Casualty Reserve Inadequacy: Rising litigation costs and 'nuclear verdicts' could force AIG to strengthen reserves in i...
Concern: Low
CEO Transition Friction: The move from a highly respected 'turnaround' CEO to a new leader could result in strategic drift or the loss of ke...
Concern: Medium
The stewardship verdict is positive, though currently in a 'Transition Tree.' The Status Quo (Outcome 1) involves Eric Andersen assuming the...
Recent Activity
2026-01-06SEC Filing (8-K)
-7.49%AIG announces CEO succession plan with Eric Andersen joining as President and CEO-elect
2025-11-05SEC Filing (8-K)
-5.44%AIG reports strong third quarter 2025 results with strategic investments and acquisitions
2024-08-01SEC Filing (8-K)
-5.45%AIG reports Q2 2024 results with deconsolidation of Corebridge Financial
2023-05-05SEC Filing (8-K)
+7.84%AIG adopted LDTI accounting standard with transition date of January 1, 2021
2022-05-04SEC Filing (8-K)
+7.41%AIG reports Q1 2022 results with strong underwriting improvement and progress on Life and Retirement separation
Valuation Table
9.5/10Decision Grade
Scenario Range
$85
Bear
$123
Base
$159
Bull
$79