Following a 6-month research restriction, AIG is upgraded to Buy with $59 price target at Credit Suisse. The team had previously seen the stock as cheap vs. book value, but not vs. earnings. "While we believe that consensus EPS estimates are still optimistic, we believe the current valuation embeds something worse following management backing off its 2015 ROE goal."
The team expects AIG will fare best among insurers when put through the Fed stress test for the first time (2015 at earliest). Thanks to the ILFC sale, CS wouldn't be surprised if AIG boosts its capital return plans before the CCAR process.
Shares +1.2% premarket