AIG (AIG): Assessing Valuation After a Steady Multi‑Week Share Price Climb

American International Group (AIG) has been quietly grinding higher, with the stock up about 10% over the past week and nearly 9% over the past month, outpacing broader insurance peers.

See our latest analysis for American International Group.

Zooming out, that strong 7 day and 30 day share price return comes on top of a solid year to date move and a healthy one year total shareholder return, suggesting momentum is building as investors warm to AIG’s improving fundamentals and profitability.

If AIG’s steady climb has your attention, this could be a good moment to explore fast growing stocks with high insider ownership and see what other fast moving, high conviction ideas are emerging on investors’ radars.

Given that shares now trade just below analyst targets but at a sizable discount to intrinsic value estimates, is American International Group still underappreciated by the market, or is the recent rally already pricing in future growth?

Most Popular Narrative: 4% Undervalued

With American International Group closing at $84.90 against a most popular narrative fair value near $88, the story leans toward modest upside driven by steady, compounding fundamentals rather than explosive growth assumptions.

The acceleration of digitalization and artificial intelligence initiatives such as the Gen AI deployment across underwriting and claims positions AIG to enhance operational efficiency, improve underwriting precision, reduce fraud, and offer more tailored insurance products, supporting improved net margins and sustained earnings growth. Portfolio optimization and divestitures, along with the completion of the AIG Next transformation (surpassing $500 million in annual run rate expense savings), have created a leaner, more focused organization. These actions are likely to yield lower operating expenses and a consistently lower expense ratio, directly boosting net margins.

Read the complete narrative.

Curious how moderate revenue growth, gently improving margins, and a lower future earnings multiple still add up to upside from here? The narrative math may surprise you.

Result: Fair Value of $88.28 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer P&C pricing and escalating climate related catastrophe losses could quickly erode AIG’s margin gains and challenge the current undervaluation narrative.

Find out about the key risks to this American International Group narrative.

Another Lens on Valuation

Looked at through earnings, AIG trades on 13.9 times profit, a touch richer than the US insurance industry at 13.4 times and well above peer averages of 10.5 times. While our fair ratio sits near 14 times, that narrow gap leaves less room for error if growth disappoints.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own American International Group Narrative

If this perspective does not quite align with your own, or you prefer hands on research, you can build a personalized view in minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding American International Group.

Looking for more investment ideas?

Before you move on, consider identifying a few high conviction candidates by scanning fresh opportunities that match your style, so you are not reacting after the market moves.

• Capture income potential early by scanning these 13 dividend stocks with yields > 3% that can steadily reinforce your portfolio through reliable cash payouts.
• Position yourself ahead of the next innovation wave by reviewing these 26 AI penny stocks shaping how businesses and consumers use intelligent technology.
• Explore potentially mispriced opportunities by targeting these 907 undervalued stocks based on cash flows where current market pessimism may not match long term cash flow characteristics.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com