Following the earnings release late on Thursday, KBW analyst Cliff Gallant reiterated his neutral rating on AIG, but raised his price target for the shares to $34 from $31, "in recognition of AIG's increase in book value during 2012." The company's book value per common share was $68.87 as of Sept. 30, increasing from $42.60 a year earlier. Gallant said that "while EPS were better than expected, the strength was in the non-core Other segment, while the ongoing insurance and aircraft leasing businesses were less profitable than expected." For the Property Casualty unit, earnings came in below Gallant's $957 million estimate, and the analyst said that the property and casualty combined ratio was "disappointing given the strong results reported by peers for 3Q12." For Allstate ( ALL), the third-quarter P&C combined ratio improved to 90.2 from 104.8 in the third quarter of 2011, while the third-quarter underwriting profit was$659 million, compared to an underwriting loss of $309 million a year earlier. For Travelers Group ( TRV), there was similar improvement, with the third-quarter combined ratio declining to 90.3% from 104.5% in the third quarter of 2011, and a third-quarter underwriting gain of $514 million, compared to an underwriting loss of $289 million a year earlier. Gallant cut his 2013 earnings estimate for AIG by a nickel to $4.50 a share, factoring-in a "a rough initial estimate of Sandy losses of $400m, based upon market share data," while keeping his 2013 EPS estimate at $3.45. The analyst said that "while AIG has executed a remarkable turnaround since 2008, we view that the next step of improving long-term ROE will be a difficult challenge. Given our concerns around ROE and also the quality of reserves, we remain cautious." Bank of America Merrill Lynch analyst Jay Cohen rates AIG a "Buy," with a price objective of $44, and on Friday raised his 2012 EPS estimate to $4.65 $4.40, "due to the upside surprise in the 3Q," while lowering his 2013 EPS estimate by a dime to $3.60, in part because of an increase in estimate expenses. Cohen said that "the P/C business did make progress in improving its underlying loss ratio, but the reported results missed our forecast partly due to $145 million of net adverse reserve development, a disappointing drag, but one that seems to represent relatively modest adjustments to AIG's reserves rather than a signal of a larger problem."