Hold Recommendation Reiterated For American International Group Inc

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- American International Group (NYSE: AIG) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that revenues have generally been declining.

Highlights from the ratings report include:
  • Powered by its strong earnings growth of 432.00% and other important driving factors, this stock has surged by 27.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • Despite the weak revenue results, AIG has outperformed against the industry average of 21.5%. Since the same quarter one year prior, revenues slightly dropped by 8.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • AMERICAN INTERNATIONAL GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, AMERICAN INTERNATIONAL GROUP increased its bottom line by earning $6.07 versus $4.27 in the prior year. For the next year, the market is expecting a contraction of 27.8% in earnings ($4.38 versus $6.07).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Insurance industry average, but is greater than that of the S&P 500. The net income increased by 150.0% when compared to the same quarter one year prior, rising from -$3,958.00 million to $1,978.00 million.

American International Group, Inc. provides insurance products and services for the commercial, institutional, and individual customers in the United States and internationally. The company operates in two segments: AIG Property Casualty, and AIG Life and Retirement. American International Group has a market cap of $72.2 billion and is part of the financial sector and insurance industry. Shares are down 2.5% year to date as of the close of trading on Friday.

You can view the full American International Group Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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