AIG Earnings: Maintaining Its Recent Path

AIG largely maintained its recent path in the fourth quarter. The annualized core operating return on equity was 9% in the quarter, in line with the result for the full year. While we are pleased to see the company show an ability to consistently generate an acceptable return, we would like to see AIG start to generate stronger returns amid very favorable market conditions. We will maintain our $75 fair value estimate for the no-moat company and see shares as about fairly valued at the moment.