AIG Stock Up Ahead of Today's Earnings Results

AIG stock is climbing in late morning trading on Monday, before the company reports its 2015 third quarter earnings results after the market close today.
By Rachel Graf ,

NEW YORK (TheStreet) -- American International Group (AIG) - Get Report stock is higher by 1.28% to $63.87 in late morning trading on Monday, before the company reports its 2015 third quarter financial results after the market close today.

Analysts are expecting the New York City-based insurance company to post a year over year decline in both earnings per share and revenue. 

AIG has been forecast to post earnings of $1.03 per share on revenue of $14.22 billion for the most recent quarter.

Last year, the company reported earnings of $1.52 per share on revenue of $16.65 billion in the 2014 third quarter.

Separately, TheStreet Ratings team rates AMERICAN INTERNATIONAL GROUP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate AMERICAN INTERNATIONAL GROUP (AIG) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Although AIG's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 13.1%. Since the same quarter one year prior, revenues slightly dropped by 3.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for AMERICAN INTERNATIONAL GROUP is currently lower than what is desirable, coming in at 27.34%. Regardless of AIG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AIG's net profit margin of 11.57% compares favorably to the industry average.
  • Net operating cash flow has significantly decreased to $105.00 million or 89.09% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: AIG
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