American International Group Stock Is Up 9% YTD, What's Next?

Core Insights - American International Group's stock has gained approximately 9% year-to-date, underperforming the S&P 500 which is up 15% during the same period [1] - AIG's stock has seen a significant increase of 90% from $40 in early January 2021 to around $75, while the S&P 500 increased by about 45% over the same timeframe [2] - AIG's adjusted net income surged from $23 million to $1.19 billion in Q1 2024, driven by a 15% year-over-year revenue increase to $15.6 billion [2] Financial Performance - AIG's total revenues for FY 2023 decreased by 14% year-over-year to $46.8 billion, primarily due to a shift in total net realized gains from $7.06 billion to -$4.61 billion [3] - The adjusted net income for FY 2023 saw a 65% reduction to $3.61 billion, influenced by a 7% increase in expenses [3] - For FY 2024, AIG's revenues are projected to reach $47.9 billion, with an expected adjusted net income margin improvement leading to an annual EPS of $7.01 [3] Market Position - AIG is currently trading at $74 per share, which is 13% below its estimated fair value of $85 according to Trefis [1] - Despite strong gains, AIG has struggled to consistently outperform the S&P 500, with returns of 50% in 2021, 11% in 2022, and 7% in 2023 [2] - The Trefis High Quality Portfolio has outperformed the S&P 500 each year, indicating that AIG may face challenges in maintaining competitive performance in the current macroeconomic environment [2]