American International Group, Inc.

Based on a comprehensive assessment, AIG presents a case for cautious optimism with a valuation that appears compelling.

Technical Analysis & Fundamentals: The stock shows emerging positive momentum after a period of underperformance and is trading near the midpoint of its 52-week range. Fundamentally, AIG exhibits strong financial health with a conservative balance sheet and improving net income, though its operational efficiency and returns on capital remain areas for improvement.

Valuation & Risk: The valuation is attractive, particularly the low PEG ratio, suggesting the stock is undervalued relative to its growth potential. While the beta indicates lower volatility than the market, investors must acknowledge inherent sector risks, including exposure to catastrophic events and interest rate fluctuations.

Recommendation: AIG is a BUY for value-oriented investors seeking a position in a financially stable insurer. The reasonable absolute valuation, combined with signs of positive earnings momentum and a strong balance sheet, outweighs concerns about operational efficiency. It is best suited for investors with a medium to long-term horizon who can tolerate the cyclical nature of the insurance industry.

*This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for AIG:

12-Month Outlook for AIG

The outlook for AIG over the next year is constructive, driven by continued positive earnings momentum and its compelling valuation. Key catalysts include the execution of its ongoing operational improvement initiatives and the potential for a re-rating as the market recognizes its strong balance sheet and financial health. Primary risks remain external, specifically the potential for large catastrophic losses or adverse movements in interest rates that could pressure profitability. Given the attractive valuation and lack of a specific analyst target, a reasonable 12-month target range could be in the mid-to-high $80s, implying moderate upside from the current price.

Wall Street Consensus

Most Wall Street analysts are optimistic about American International Group, Inc.'s 12-month outlook, with consensus target around $79.54, indicating expected upside potential.

Overall, AIG has investment potential but also faces challenges. Here are key factors to weigh before investing.

AIG has delivered mixed performance with recent strength but longer-term underperformance relative to the market. The stock shows moderate volatility characteristics relative to the broader market based on its beta below 1.

Over the past month, AIG has posted strong gains of 9.8%, though its three-month performance of 1.52% modestly trails the market by 0.33%. This suggests recent momentum may be emerging after a period of relative weakness compared to broader indices.

Currently trading at $79.54, AIG sits approximately in the middle of its 52-week range ($71.25 to $88.07), indicating neither strongly overbought nor oversold conditions. The stock would need to advance about 11% to reach its 52-week high while having about 10% downside to its recent low.

Revenue & Profitability AIG demonstrated modest revenue growth from Q3 to Q4 2025, with revenue increasing from $6.4 billion to $6.56 billion. The company maintained relatively stable profitability with a gross profit margin of 33.9% in Q4, although operating margins dipped slightly to 10.1% due to higher administrative expenses. Net income improved significantly to $735 million in Q4 from $519 million in Q3, reflecting better tax benefits and cost management.

Financial Health AIG maintains a conservative debt structure with a low debt-to-equity ratio of 0.22 and strong liquidity metrics, including a current ratio of 9.8. The company's interest coverage ratio of 6.3 indicates sufficient earnings to service its debt obligations comfortably. However, the cash flow to debt ratio of 0.07 suggests limited operating cash flow relative to total debt, warranting monitoring of cash generation capabilities.

Operational Efficiency AIG's operational efficiency metrics show room for improvement, with a return on equity of 1.8% and return on assets of 0.5%, indicating suboptimal capital utilization. The asset turnover ratio of 0.04 reflects relatively low revenue generation from the company's asset base. The negative cash conversion cycle of -73.5 days demonstrates efficient working capital management, as AIG collects from customers well before paying its suppliers.

Based on the PE ratio metrics, AIG appears reasonably valued. The trailing twelve-month (TTM) PE of 13.82 and the forward PE of approximately 15.74 suggest a modest valuation level. The notably low PEG ratio of 0.35, which is significantly below 1, strongly implies the stock is undervalued when its earnings growth prospects are considered, despite an elevated EV/EBITDA figure.

A direct industry comparison cannot be performed as industry average data is unavailable. However, the PB ratio of 1.04 indicates the stock is trading close to its book value, which is generally considered a conservative valuation level for an insurance company. In the absence of specific benchmarks, these absolute valuation metrics collectively paint a picture of a potentially undervalued equity.

Volatility risk for AIG appears moderate, as evidenced by a Beta of 0.598, indicating the stock is historically less volatile than the broader market. However, investors should note the potential for significant loss, as reflected in the one-year maximum drawdown of -18.05%, which represents a substantial peak-to-trough decline despite the lower beta.

Other risks for AIG are not heavily signaled by short interest, which is reported as negligible or 'None', suggesting a lack of strong bearish sentiment from speculators. Nevertheless, the firm operates in the inherently complex and regulated insurance sector, facing risks related to interest rates, catastrophic claims events, and investment portfolio performance, which are not captured by simple metrics like short interest.