Analysts Just Slashed Their American International Group, Inc. (NYSE:AIG) EPS Numbers

Market forces rained on the parade of American International Group, Inc. (NYSE:AIG) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the eleven analysts covering American International Group provided consensus estimates of US$27b revenue in 2024, which would reflect a substantial 41% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of US$2.07 per share in 2024. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$27b and losses of US$1.73 per share in 2024. So it's pretty clear the analysts have mixed opinions on American International Group even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase in per-share losses.

View our latest analysis for American International Group

The consensus price target held steady at US$82.84, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. Over the past five years, revenues have declined around 1.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 65% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.3% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect American International Group to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that American International Group's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of American International Group.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple American International Group analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.