Bear of the Day: American Int’l Group (AIG)

We are downgrading our recommendation on the shares of American International Group (AIG) on a poor third quarter performance and the likelihood of more one-time charges in 2011.

Third quarter loss was dramatically behind the Zacks Consensus Estimate of earnings, primarily driven by $4.5 billion of restructuring charges including loss from discontinued operations and reduced investment income although core insurance operations generated stable results. While benefits, claims and expense control and asset disposals increase operating efficiencies, the execution of the recapitalization program also appears favorable for the book value growth.

Although AIG is poised to grow its top line on the back of the reviving economy, several nonrecurring charges are expected to mar the desired upside in the upcoming quarters.

AMER INTL GRP (AIG): Free Stock Analysis Report

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