AIG on Thursday announced a new authorization to repurchase up to $1 billion in common shares, bringing its total remaining buyback authorization to $1.4 billion. The company bought back about $600 million in common shares during 2013, lowering its weighted average share count for the year by 14%.
Also on Thursday, AIG said it would raise its quarterly dividend on common shares to 12.5 cents from 10 cents.
KBW analyst Meyer Shields on Sunday reiterated his "market perform" rating for AIG, with a price target of $54.00. "AIG trades at 71% of its current $68.62 book value per share - a discount to its specialty insurer peers, but on a metric that we think is both obvious and with limited predictive power. We think the 10.1x 2015E EPS valuation fairly balances the core units' improving earnings against the risks of persistent investment yield pressure and uncertain rate and loss reserve adequacy should loss cost inflation
accelerate," Shields wrote in a note to clients.
He estimates AIG will earn $4.25 a share this year, with EPS growing to $4.85 in 2015.