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Sep. 8, 2014, 7:30 AM
Aug. 5, 2014, 9:08 AM
- Calling his appointment as next CEO of AIG a "vote for continuity," Peter Hancock tells earnings call listeners there will be no abrupt change in strategy at the company when he takes over on September 1.
- The stock has given back some its big premarket gain as Hancock speaks of "pricing pressures" as likely to constrain continued improvements in the company's loss ratio for the remainder of the year.
- Earnings call presentation slides
- Shares +1.8% premarket
- Previously: Parting gift from Benmosche as AIG beats and boosts buyback
Aug. 4, 2014, 4:06 PM
- American International Group (NYSE:AIG): Q2 EPS of $1.25 beats by $0.20.
- Revenue of $8.53B (+2.2% Y/Y) beats by $400M.
- Shares +1.9%.
Jun. 6, 2014, 9:48 AM
- AIG (AIG +0.9%) takes out a multi-year high after last night's $2B boost to its share repurchase program. The current price of $55.42 hasn't been seen since the early days of 2011.
- Barclays chimes in after the news, lifting its price target on the Overweight-rated stock to $64 from $56.
- Previously: AIG adds $2B to buyback
Jun. 4, 2014, 10:56 AM
- Providing a particular boost to the large insurers, the Senate today approves a bill giving the Fed the flexibility to tailor capital rules for insurers which may fall under their purview - as opposed to original Dodd-Frank language which could have required a "one size fits all" policy in which insurers would have faced the same capital rules as those applied to largest banks.
- “It is becoming increasingly clear that the Fed will be given the flexibility to tailor its regulation of insurance companies,” says FBR's Ed Mills. “This should be a strong positive for the insurance firms deemed systemically important.”
- Speaking at his company's annual meeting today (webcast and presentation slides), Prudential (PRU +2.7%) Vice Chairman Mark Grier is pleased with the Senate action and says his company can meet any reasonable capital standard.
- MetLife (MET +2.5%), AIG (AIG +0.9%)
May 27, 2014, 10:56 AM
- Alongside a rise in the common stock to a multi-year high, AIG's (AIG +0.9%) TARP warrants advance to a new all-time high of $24.03, beating the $24 they traded at on the day of their issuance in January 2011.
- The warrants allow their owners the right to buy AIG common at $45 per share up to January 2021.
- "Our inclination remains to run from the popular and embrace the hated where prices tend to reflect such mistrust," wrote Bruce Berkowitz in 2011 as the warrants plunged as low as $4.66 each. In addition to its 75.7M stake of AIG common stock, Fairholme is the largest holder of the insurer's warrants with 24.5M as of March 31.
May 21, 2014, 10:11 AM
- "Investors should move their focus from capital deployment to capital generation," says analyst Michael Nannizzi. "[AIG] is best positioned among SIFI candidates to deploy capital accretively into its core businesses if large-scale buybacks are not a near-term option."
- The upgrade, says Nannizzi, therefore, is not about an easier regulatory environment, but about AIG's "second best" capital deployment option being underappreciated by investors.
- The stock is up 2.4% on the session, and earlier this morning touched its highest level since January 2011.
- Previously: AIG upgraded to Buy at Goldman
May 21, 2014, 7:24 AM
May 15, 2014, 3:25 PM
- AerCap (AER -2.7%) financed the cash portion of the purchase (closed yesterday) primarily with new debt issuance, significantly boosting leverage, says S&P's Betsy Snyder, downgrading the credit rating to BB+ from BBB- and removing the company from CreditWatch negative.
- "We expect the consolidated entity to generate solid cash flow and gradually decrease leverage following the merger, but we don't expect AerCap's debt leverage to return to previous levels for at least the next 18 to 24 months," she says.
- AIG is now the owner of nearly 100M shares of AerCap.
- Previously: AerCap rally means billions for AIG
May 7, 2014, 11:56 AM
- Efficient markets are hard at work as a big bounce for AIG (AIG +2.8%) has the stock erasing nearly all of its knee-jerk post-earnings loss from yesterday.
- Summing up a good bit of sell-side sentiment, Deutsche's Josh Shanker says the "beat" was thanks to better-than-expected numbers from capital market sensitive items. He sees "normalized" core EPS at closer to $0.79, well shy of his team's estimate of $0.84. "The slow progress on earnings growth is key to our Hold recommendation."
- Those with more skin in the game at Seeking Alpha acknowledge a bit of disappointment with operating results, but also note a sizable gain in book value - up 4.6% Q/Q to $71.77 per share - and the continued wide discount to book the stock trades at.
- "As long as book value is growing and AIG undertakes efforts that will result in better underwriting discipline, AIG still makes a very interesting value proposition," writes Achilles Research.
May 6, 2014, 8:56 AM
- Nomura's Cliff Gallant boosts his targets on AIG post-earnings as buybacks and debt reduction offset a bit of operating weakness. He sees FY14 EPS of $4.72 vs. $4.60 previously and FY15 to $5.24 from $5.10. He also lifts his price target to $53 from $50, but remains Neutral on the stock amid "nagging quarterly reserve additions, heightened competition in its core commercial business and single digit ROEs, but also acknowledge that the company has been making steady material operating improvements."
- On the conference call, there's some frustration with the pace of buybacks. The company used up $867M of its $1.4B authorization in Q1. Presumably, the rest will be accounted for this quarter. Will a faster pace ensure after that, especially once the sale of ILFC closes? Management - with federal regulators looking over its shoulder - plays it coy.
- CC presentation slides
- Previously: AIG lower after revenue and profit slips
- Previously: American International Group beats by $0.15, misses on revenue
- Shares -2.3% premarket
Apr. 16, 2014, 3:18 PM
- Alongside Barclays' Jay Gelb's upgrade of Lincoln Financial (LNC +2.3%) to Overweight is a downgrade of Reinsurance Group of America (RGA -0.3%) to Equal Weight and cut in the price target to $81 from $88, citing increased competition in the life reinsurance market.
- For Lincoln, Gelb has boosted confidence in the company's ability to generate strong earnings growth despite the low interest rate environment.
- His top picks in the sector remain Prudential (PRU +1.6%), MetLife (MET +0.8%), Aflac (AFL +1.5%), and Protective Life (PL +1.2%), and he has a "positive outlook" on AIG and Hartford Financial (HIG +1.4%).
- "AFL has a top-tier ROE as well as robust share buybacks, and should benefit in 2015 from the Japan Post partnership," writes Gelb, noting yen weakness will hurt GAAP earnings, but the company has hedged profit repatriation back to the States. AIG and HIG, he says, "should deliver substantial share buybacks along with attractive valuations and ultimately higher ROEs."
- ETFs: KIE, IAK, KBWI, KBWP
Mar. 27, 2014, 2:28 PM
- Struggling one day after the CCAR results are insurers AIG (AIG -0.9%), MetLife (MET -2.3%), and Prudential (PRU -2.6%). The group wasn't part of the CCAR process, but is potentially under the thumb of the Fed as it relates to capital returns.
- If there is one takeaway from the CCAR, it's that the Fed - if anything - is getting even tougher with the larger institutions as it relates to capital returns. Citigroup was rejected and BofA and Goldman - facing rejection - were forced to dial back plans and resubmit their requests. "CCAR highlighted the challenges large-caps have in returning excess capital," said Goldman's Richard Ramsden earlier today.
Mar. 12, 2014, 7:13 AM
- "Elevated expenses continue to impose a ceiling on the profitability of the property and casualty business," says analyst Joshua Shanker, cutting AIG to Hold from Buy with price target reduced to $55 from $58. "Management indicates that Fuji unit integration costs will keep expenses high through 2014, which suggests that core ROE may stagnate at around 6% for the foreseeable future."
- "While we believe cash flow will ultimately exceed core and GAAP EPS, we believe incremental buyers will need to see additional combined ratio improvement to be motivated to purchase AIG."
- Shares -1% premarket
- Monday: Leon Cooperman remains a buyer, seeing ROE of 10% and EPS of $6 per share
Feb. 14, 2014, 3:28 PM
- Remembering a day before AIG ran into problems in the financial crisis, Sandler O'Neill's Paul Newsome says the insurer's competitive advantage was having a lower expense ratio than peers (while maintaining an average loss ratio). Noting improvement in the loss ratio, but an expense ratio higher than peers, Newsome asks AIG management (CC transcript) if low expenses is still a goal.
- Responding, CEO Bob Benmosche says the company wants to be competitive on both fronts, but it takes time and investment. "We're building this company not only for 2014, but for 2018 and 2020."
- AIG P&C boss Peter Hancock says loss and expense ratios are outcomes of doing good business, and not necessarily goals or competitive advantages. "Our competitive advantage comes by the expertise that we have and the risks that we take ourselves or help our customers to manage if they choose to retain them ... The investments that we’re making are to become true experts in the risk that we’ve chosen to specialize in around the world." Expect a higher expense ratio than the past, he says, but reminds historical expense ratios are "flattered" by reinsurance strategies no longer in place on the same scale anymore.
- The stock remains under pressure following last night's earnings, down 1.4%.
- Earlier coverage
Feb. 14, 2014, 7:58 AM
- After an initial pop on the earnings release last night, AIG turns lower by 1% in premarket action as investors look past some big headline numbers, and hone in on continued weakness in property and casualty, where adjusted underwriting results continued to deteriorate.
- "P&C margin deteriorated Q/Q, a disappointing trend," says Barclays' Jay Gelb, cutting his price target to $56 from $60. He still expects share repurchases to accelerate, perhaps reaching $10B by year-end 2015.
- Maintaining his Buy and $59 price target, BofA's Jay Cohen also notes worse-than-expected P&C results.
- "We think disappointing property-casualty results will likely put near-term pressure on the stock," says Janney's Larry Greenberg, maintaining his Neutral rating.
- Previous earnings coverage
- CC begins in 5 minutes
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