Story updated at 9:55 a.m. to reflect market activity.
Shares of AIG were falling 0.7% to $53.43 in morning trading.
The analyst firm also raised its EPS estimates for the insurance company through 2015. Sterne Agee analysts raised its 2014 EPS estimates for AIG to $4.71 a share from its previous estimates of $4.50 a share. The firm expects the company to report earnings of $4.60 a share for 2015, up from $4.50 a share.
"We view the EPS upside as relatively low quality, driven by higher alternatives and prepayment NII and fair value changes in DIB/GCM," analyst John M. Nadel wrote. "Neither, in our view, adds much to the intrinsic value of the stock. On a core basis, Life & Retirement was in line and P&C results fell short (AY LR was better, though more than offset by higher Cats and material unfavorable PYD)."
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 number of 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 growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."