Research

AIG recovered sequentially in Q2, but EPS and pre-tax margin remained below last year. At $74.85, the shares already approximate a reasonable value for the current earnings run rate.

Operating earnings rose 16.3%, but insurance profits declined and currency helped the result. At $507, the shares sit near our $540 base-case value.

Aetna’s margin recovery lifted profit and full-year guidance. At $95.29, however, CVS already discounts much of the repair while medical costs and leverage keep the thesis conditional.