AFG: Buybacks And Dividends Will Sustain Returns Amid Softer Revenue Outlook

Analysts trimmed their average price target for American Financial Group slightly to approximately $139.60, citing modestly softer revenue growth expectations, partly offset by marginally improved profit margin forecasts and a steady valuation multiple outlook.

What's in the News

• American Financial Group updated its share repurchase activity, buying back 788,134 shares, or about 0.95% of shares outstanding, for $96.57 million in the third quarter of 2025. This brings cumulative repurchases under the long running program to 46,962,947 shares, or 46.78%, for $2.52 billion (Key Developments).
• The Board of Directors declared a special cash dividend of $2.00 per share, payable November 26, 2025, to shareholders of record as of November 17, 2025, with an expected aggregate payout of roughly $167 million (Key Developments).
• The company announced a regular quarterly dividend of $0.88 per share, payable October 24, 2025. This reflects a previously disclosed 10% increase in the annual rate versus the level in place since the fourth quarter of 2024 (Key Developments).

Valuation Changes

• Fair Value Estimate edged down slightly from $140.20 to $139.60, reflecting a modest reduction in intrinsic value expectations.
• Discount Rate was effectively unchanged, ticking down marginally from 6.956 percent to 6.956 percent, indicating a stable risk and return profile.
• Revenue Growth moved lower, with the long term forecast declining from approximately negative 1.46 percent to negative 1.69 percent, signaling slightly softer top line expectations.
• Net Profit Margin increased modestly from about 14.56 percent to 14.59 percent, pointing to a small anticipated improvement in profitability.
• Future P/E was broadly stable, nudging up from 12.45x to 12.46x, suggesting little change in the market valuation multiple assumption.