Piper Sandler has reduced its 12-month price target on American International Group to $88.00 from $95.00, while preserving an Overweight rating on the insurer's stock. The firm made the change even as it acknowledged a mix of constructive and disappointing results in AIG's recent performance.
Market context and valuation
InvestingPro data indicate AIG is currently trading at $78.44 and carries a price-to-earnings ratio of 13.81. The firm's most recent revenue figure stands at $26.64 billion, representing a -1.44% growth rate over the last twelve months. Those top-line dynamics were part of Piper Sandler's assessment that AIG's overall results have been less impressive relative to some industry peers.
Underwriting versus catastrophe and reserve outcomes
Piper Sandler noted two offsetting features in AIG's results. On one hand, catastrophe losses came in better than expected and reserve development was favorable. On the other hand, the research note said AIG's underlying underwriting outcomes fell short of what the firm had anticipated. That shortfall, the analyst argued, weakens the case for extrapolating recent improvements in the underlying combined ratio across differing market conditions.
The research team specifically highlighted uncertainty about whether investors should project the lower underlying combined ratio forward given current market dynamics. In insurance, the combined ratio is a central metric for underwriting profitability, and questions about its sustainability can influence valuation and investor confidence.
Top-line pressures and management outlook
Beyond underwriting, Piper Sandler flagged softer-than-expected top-line performance as a reason the company looks less compelling against peers. InvestingPro's revenue and growth figures were cited to underscore that pace. Nonetheless, Piper Sandler pointed to management's expectation of revenue growth in 2026 and the potential for favorable shifts in business mix to offset some near-term concerns, which helped justify keeping the Overweight rating despite the lower price target.
Valuation, dividends and additional analysis
InvestingPro analysis referenced in the note suggests that AIG is trading above its Fair Value estimate even as the company has continued to pay dividends for 14 consecutive years and offers a current yield of 2.29%. The research platform also provides further ProTips and deeper financial-health metrics for subscribers seeking expanded context on AIG's positioning.
Other recent developments
In quarterly results, AIG reported fourth-quarter 2025 earnings per share of $1.96, above the $1.90 forecast, and revenue of $6.97 billion, modestly topping the $6.91 billion estimate. Those results were described as strong and contributed to positive investor sentiment.
Separately, Keefe, Bruyette & Woods increased its price target for AIG to $97 from $96 and maintained an Outperform rating. KBW cited expectations for faster premium growth, higher net investment income and larger reserve releases as the rationale for raising earnings-per-share estimates for 2026 and 2027.
Together, these analyst actions and recent quarterly results illustrate a mix of performance indicators: encouraging catastrophe and reserve outcomes, offset by underlying underwriting and top-line pressures that have prompted at least one major analyst to pare back its valuation while leaving a constructive rating in place.