On Friday, Piper Sandler reaffirmed its Overweight rating on shares of American International Group (NYSE:NYSE:AIG) with a steady price target of $89.00. The firm's stance comes in the wake of AIG's recent public offering of Corebridge Financial (CRBG) shares, which was announced on Thursday, May 30, 2024.
The offering is seen as a strategic move for AIG, aligning with its goal to deconsolidate its financial statements by the third quarter of 2024. Piper Sandler highlighted that this action is a significant step towards reducing AIG's ownership in Corebridge Financial to below 50% before the end of the second quarter of 2024, as previously stated by AIG.
The analyst from Piper Sandler noted the importance of this transaction, stating, "We are maintaining our rating on AIG following its announcement of an offering of CRBG shares to the public on 5/30/24." They added, "Notably, the transaction moves AIG towards fulfilling AIG's publicly stated intention to deconsolidate its financials by the third quarter of 2024 and reduces uncertainty about how AIG will reduce its ownership below 50% by the end of the second quarter."
AIG's move is part of a broader strategy to streamline its operations and financial reporting. The firm's commitment to this plan has been underscored by the recent share offering, which is expected to bring AIG closer to achieving its stated objectives within the set timeframe.
InvestingPro Insights
As American International Group (NYSE:AIG) navigates its strategic move to deconsolidate its financial statements, real-time data from InvestingPro provides additional context for investors. AIG's market capitalization stands at $51.93 billion, reflecting the company's significant presence in the insurance industry. With a price-to-earnings (P/E) ratio of 11.58, AIG trades at a valuation that suggests a potential for investment consideration, especially when compared to the adjusted P/E ratio for the last twelve months as of Q1 2024, which is slightly lower at 11.06. Furthermore, the company's commitment to shareholder returns is evident with a dividend yield of 2.04% and a notable 25.0% dividend growth over the past year.
InvestingPro Tips highlight AIG's aggressive share buyback strategy and high shareholder yield as key factors that may be appealing to investors. Additionally, while six analysts have revised their earnings estimates downwards for the upcoming period, AIG's position as a prominent player in the insurance industry and its consistent dividend payments over the last 12 years underscore its stability. For those interested in further analysis, there are additional InvestingPro Tips available, providing a comprehensive understanding of AIG's financial health and market position. To explore these insights, visit https://www.investing.com/pro/AIG and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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