Deutsche Bank analyst Joshua Shanker has raised his rating on American International Group Inc. to "hold" from "sell," as he believes that negative catalysts are now priced into the stock.
Shanker wrote that he is "skeptical regarding the prospects for AIG," but he believes the company's shares "might have found a bottom." AIG is facing a number of concerns such as the challenges in executing a turnaround. Shanker wrote that shareholders still believe that AIG CEO Brian Duperreault is "the right person for the job," but market performance shows that getting the company into a strong position will not be an easy task. The restructuring efforts could lead to a charge in the fourth quarter, he added.
Shanker wrote that a hard P&C market is not a reliable catalyst for AIG, believing that the company's appetite for reinsurance could limit its ability to expand margins. He warned that AIG's reserves seem to be "riskier than most" in the event that liability lines push for price hikes.
The analyst increased his price target by $1 to $59. His EPS estimates are $1.70 for 2017 and $4.85 for 2018.