美国国际集团公司（纽约证券交易所代码：AIG）的良性增长支撑了其股价

Withaprice-to-earnings(or"P/E")ratioof11.2xAmericanInternationalGroup,Inc.(NYSE:AIG)maybesendingbullishsignalsatthemoment,giventhatalmosthalfofallcompaniesintheUnitedStateshaveP/Eratiosgreaterthan17xandevenP/E'shigherthan33xarenotunusual.Although,it'snotwisetojusttaketheP/Eatfacevalueastheremaybeanexplanationwhyit'slimited.

Recenttimeshaven'tbeenadvantageousforAmericanInternationalGroupasitsearningshavebeenfallingquickerthanmostothercompanies.Itseemsthatmanyareexpectingthedismalearningsperformancetopersist,whichhasrepressedtheP/E.You'dmuchratherthecompanywasn'tbleedingearningsifyoustillbelieveinthebusiness.Ifnot,thenexistingshareholderswillprobablystruggletogetexcitedaboutthefuturedirectionoftheshareprice.

CheckoutourlatestanalysisforAmericanInternationalGroup

NYSE:AIGPricetoEarningsRatiovsIndustryDecember18th2023

KeentofindouthowanalyststhinkAmericanInternationalGroup'sfuturestacksupagainsttheindustry?Inthatcase,our

free

reportisagreatplacetostart.

WhatAreGrowthMetricsTellingUsAboutTheLowP/E?

There'saninherentassumptionthatacompanyshouldunderperformthemarketforP/EratioslikeAmericanInternationalGroup'stobeconsideredreasonable.

Takingalookbackfirst,thecompany'searningspersharegrowthlastyearwasn'tsomethingtogetexcitedaboutasitpostedadisappointingdeclineof66%.Unfortunately,that'sbroughtitrightbacktowhereitstartedthreeyearsagowithEPSgrowthbeingvirtuallynon-existentoverallduringthattime.Soitappearstousthatthecompanyhashadamixedresultintermsofgrowingearningsoverthattime.

Shiftingtothefuture,estimatesfromthetenanalystscoveringthecompanysuggestearningsshouldgrowby4.4%peryearoverthenextthreeyears.That'sshapinguptobemateriallylowerthanthe12%eachyeargrowthforecastforthebroadermarket.

Withthisinformation,wecanseewhyAmericanInternationalGroupistradingataP/Elowerthanthemarket.Apparentlymanyshareholdersweren'tcomfortableholdingonwhilethecompanyispotentiallyeyeingalessprosperousfuture.

TheKeyTakeaway

Whiletheprice-to-earningsratioshouldn'tbethedefiningfactorinwhetheryoubuyastockornot,it'squiteacapablebarometerofearningsexpectations.

Aswesuspected,ourexaminationofAmericanInternationalGroup'sanalystforecastsrevealedthatitsinferiorearningsoutlookiscontributingtoitslowP/E.Atthisstageinvestorsfeelthepotentialforanimprovementinearningsisn'tgreatenoughtojustifyahigherP/Eratio.Unlesstheseconditionsimprove,theywillcontinuetoformabarrierforthesharepricearoundtheselevels.

Don'tforgetthattheremaybeotherrisks.Forinstance,we'veidentified1warningsignforAmericanInternationalGroupthatyoushouldbeawareof.

Ofcourse,youmightalsobeabletofindabetterstockthanAmericanInternationalGroup.SoyoumaywishtoseethisfreecollectionofothercompaniesthathavereasonableP/Eratiosandhavegrownearningsstrongly.

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ThisarticlebySimplyWallStisgeneralinnature.Weprovidecommentarybasedonhistoricaldataandanalystforecastsonlyusinganunbiasedmethodologyandourarticlesarenotintendedtobefinancialadvice.Itdoesnotconstitutearecommendationtobuyorsellanystock,anddoesnottakeaccountofyourobjectives,oryourfinancialsituation.Weaimtobringyoulong-termfocusedanalysisdrivenbyfundamentaldata.Notethatouranalysismaynotfactorinthelatestprice-sensitivecompanyannouncementsorqualitativematerial.SimplyWallSthasnopositioninanystocksmentioned.