They will now start buying it back and continue to lay you all off. Time to look for another job.
4 replies (most recent on top)
Never say never. $55 is achievable.
Current stock decline is a collective expression of global portfolio managers' allocation views on financial services (ETF: XLF) in general and insurance industry (Metlife, Chubb, etc) in particular. Carl Icahhn probably saw this coming and so he sold his stake in summer at a much higher price.
If these companies (AIG/Metlife) fall further, expect consolidation from the likes of
a. Domestic: BRK, Chubb, or
b. International: Chinese players such as China Life Insurance, Ping An, etc. Even Tata may try to get in just like they bought Jaguar.
AIG's moat is its distribution. If that is combined with good data pipelines, AIG can be a $200B giant (5x from here). On that note, Apple / Alphabet / Facebook / AMZN can come in and buy the Consumer (PI+Travel+Life) part of the company at a 10-25% premium. They won't be interested in Commercial book as it is poor quality.
Sum of Parts adds up the long run value (at current hurdle rates) to around $40-$50 per share.
The best is for AIG to go private under a PE firm regime and get straightened out. The first thing PEs do is to align exec incentives to results. BD PZ PYS DD KH or SS won't get paid what they get now. However, the firm value can boost to $200B in a decade - easily.
AIG stock just hit $42.50. WOW. Do Executives still get paid for doing such a poor job. Time to remove the board also. The stock was at $63.00 when BD was hired. Earning report at the end of the month. It will be POOR. Stock going lower. Nice job.
Stock price below 44 this morning. They get paid to do this??? WOW It will continue to go down until earnings and after the poor numbers it will start to move up only because of cash and trying to sell off divisions. The can not lay off enough people to make a dent in the costs. Good Luck
Are these people for real we will not see AIG Stock at 55 in our life time.
We cut our 12 month target price by $5 to $55, or 10.2X our 2019 operating EPS estimate of $5.40 (cut by $0.20), below the peer average of 12.5X and appropriate, we think, given AIG's mixed near term trends. To that end, we cut our 2018 operating EPS estimate by $1.49, to $3.21, to reflect expected Q3 catastrophe claims of $1.5B to $1.7B (pretax) from Japanese storms ($900M-$1B) and Hurricane Florence and CA mudslides ($600M-$700M); and Q4 Hurricane Michael claims ($300M-$500M). We still expect year to year results to improve amid the absence of $3 billion in claims that hurt results in 2017's Q3, and see a more conservative reinsurance program aiding AIG's net exposure to catastrophes. We also see AIG's spreads-based units aided by a rise in interest rates. Currently trading at 8.7X our 2019 operating EPS estimate and yielding 2.7%, we view the shares as undervalued versus peers, but think AIG needs to step up its restructuring actions to drive better underwriting efficiencies.