AIG (AIG) Could Post a Large Q3 Profit, But Does It Matter?

November 5, 2009 3:52 PM EST

Shares of bailed out insurer American International Group (NYSE: AIG), your friend through good times and bad, are trading higher ahead of their third quarter earnings release, scheduled for tomorrow, November 6, 2009. The stock is up $2.56, about 7%, to $38.74.

AIG is expected to report a Q309 EPS of $1.20 and revenues of $23.02 billion. AIG lost an astonising $9.24 billion, or $3.42 per share, in last year's third quarter. For the last quarter, AIG performed amiably, posting an EPS of $2.30.

AIG is up an astonishing 42% since they reported their second quarter results.

Data from Bloomberg shows that no one has a Buy recommendation for AIG. Not one. Additionally, 6 have a Hold rating and 3 suggest to Sell now, while you can. Surprisingly, the analysts have a consensus price target of $28.00. Their price target range is $44 as a high to $15 as not.

In September, Wells Fargo downgraded AIG to Underperform. "We think a reasonable case could be made that the company has virtually no tangible book value at the moment," said Wells. "At the end of the day, the US government owns almost 80% of AIG. The rest of us are just along for the ride." The firm has a valuation range of $10 - $20.

Credit Suisse recently raised their third quarter EPS estimates on AIG, while maintaining an Underperform rating. The firm now sees AIG reporting a Q309 EPS of $4.50, where the Street consensus is $1.20.

UBS resumed coverage on AIG with a Neutral rating.

Not too much has been written recently about AIG, though what has been written has a definite "disdain" bias. And, to put icing on the cake, AIG appointed Bob Benmosche as their CEO to lead them from the darkness into the light. Mr. Benmosche, no matter if he shot money out of his eyes or gold bullion out of his, uh hum, you know, cannot escape the immediate hatred from the press and peers. This occurred during the third quarter, which is why it's mentioned in the article. Benmosche immediately wanted to talk with besmirched former-CEP Hank Greenberg. The CEO also received criticism after making jabs at New York Attorney General Andrew Cuomo. Finally, BobBen is not having a conference call after their earnings release tomorrow. Can the man make a difference? Or will the rebounding economy be hailed as the savior for AIG, and Benmosche noted for his ability to keep his finger out of the cookie jar, and other fun cliches?

American International Group (AIG) is expected to release their earnings report at 7:00 AM (EDT), November 6, 2009. Stay tuned to Streetinsider.com's Earnings section to see our analysis of the highly-anticipated quarterly results within seconds of their release.

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• Credit Suisse
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