Piper Analysts Met With AIG Management, Left Excited

After meeting with American International Group Inc’s management team, analysts at Piper Jaffray reiterated an Outperform rating on the stock and shared a few takeaways.

Open To Further Divestitures

First off, they noted that, although “a split of the company along the lines suggested by recent activists is unlikely,” they do expect an increasingly simplified business over time, largely driven by further divestitures. In fact, Hancock assured there "are no sacred cows" when talking about divesting non-core assets.

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Capital Return Upside Ahead

In addition, the analysts believe there could be upside to capital return going forward – as management said it remains focused on this area, and, while never easy, they are also confident on the management’s ability to execute on cost savings. The company is aiming at a 3 to 5 percent annual reduction in operating expenses.

Legacy Granularity Going Forward

Finally, they pointed out that “incremental disclosure is likely to provide granularity on legacy, under-performing businesses and their ‘drag’ on total company returns.”

Piper Jaffray analysts concluded, “While the pace and sequencing of events to unlock value may not line up neatly with recent activist calls, and they don’t expect a split any time soon, they do believe “management is more highly focused as a result of their involvement.”

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

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