AIG (AIG) has nearly 40% upside potential as the company continues to shed noncore assets and begins a buyback program that should be much bigger than investors are expecting, writes Deutsche Bank analyst Joshua Shanker in a note today. Shanker sees the stock hitting $40 per share, up from about $29 today.
“We believe $15-20 billion (or even more) worth of buybacks over the next twelve months is achievable as the Treasury and AIG sell off the remaining non-core assets. We believe bok value per share growth in excess of 30% is possible if shares continue to hover around their current price.”
As of the end of the fourth quarter, AIG had about 1.897 billion shares; based on that number its market cap today would be about $55 billion. Based on Shanker’s projections, the company could presumably repurchase about a third of its shares.
Shanker notes that AIG has also had success at selling its non-core assets, and some big banks may be in the market to buy some more of its assets.
