- In the past week, American Financial Group announced its second-quarter 2025 results, reporting earnings per share that surpassed analyst expectations, while revenues missed forecasts and underwriting profit declined in key segments.
- An interesting insight is that despite increased premiums in areas such as commercial auto liability and crop insurance, the company faced higher catastrophe losses, weaker returns on alternative investments, and challenges from social inflation, impacting overall profitability and operational trends.
- We’ll explore how the mixed earnings results, especially the drop in underwriting profit, may influence American Financial Group’s investment outlook.
The end of cancer? These 26 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
American Financial Group Investment Narrative Recap
To own shares of American Financial Group, an investor needs confidence in its ability to grow specialty insurance premiums, maintain disciplined underwriting, and navigate volatile investment returns. The recent earnings report, which showed higher premiums but a dip in underwriting profit and alternative investment income, brings the short-term focus squarely onto whether management can offset rising catastrophe losses, a key catalyst and risk for the stock. This latest news does not materially change those priorities, but it may heighten near-term scrutiny on underwriting quality versus exposure to losses.
Among recent company actions, the latest buyback update stands out: American Financial Group repurchased 311,960 shares for US$39 million between April and June 2025. While this demonstrates ongoing capital return activity to shareholders, its direct impact on core business catalysts, like underwriting performance and investment income, remains limited in the current environment.
However, as underwriting losses rise and social inflation pressures profits, investors should especially be aware that...
Read the full narrative on American Financial Group (it's free!)
American Financial Group's projections anticipate $7.4 billion in revenue and $1.1 billion in earnings by 2028. This outlook assumes a -2.5% annual decline in revenue and a $336 million increase in earnings from the current $764.0 million.
Uncover how American Financial Group's forecasts yield a $131.80 fair value, in line with its current price.
Exploring Other Perspectives
Simply Wall St Community members produced two fair value estimates for AFG ranging from US$131.80 to US$292.99 per share. With underwriting profit under pressure from higher catastrophe claims, it’s clear that market views diverge and deserve a closer look.
Explore 2 other fair value estimates on American Financial Group - why the stock might be worth over 2x more than the current price!
Build Your Own American Financial Group Narrative
Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your American Financial Group research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
- Our free American Financial Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate American Financial Group's overall financial health at a glance.
Ready For A Different Approach?
Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:
- We've found 18 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
- AI is about to change healthcare. These 26 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
- Outshine the giants: these 20 early-stage AI stocks could fund your retirement.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com