UPDATE 1-Friedman downgrades AIG to market perform
(Recasts; adds details, share movement)
Aug 7 (Reuters) - Friedman Billings Ramsey downgraded American International Group Inc (AIG.N: Cotización) to "market perform" from "outperform," saying the insurer "could not have reported more horrific results than those produced in the second quarter."
Friedman reversed its 2008 estimate for the insurer to a loss, while Lehman Brothers and J.P. Morgan Securities lowered their profit estimates.
The world's largest insurer on Wednesday posted its third consecutive quarterly net loss of more than $5 billion as it wrote down bad mortgage-related investments.
Friedman said that AIG was simply too large and complex for anyone to fully understand, and that the company could eventually need to be broken into pieces.
The brokerage, which slashed its price target on the stock to $38 from $53, expects AIG to post a loss of 69 cents a share in 2008. It had previously estimated a profit of $2.15.
Lehman Brothers also cut its price target on AIG to $26 from $29 and lowered its 2008 earnings estimate for the insurer to 9 cents from $2.35 a share.
JP Morgan cut its 2008 earnings estimate for AIG to 30 cents from $2.41 a share. It maintained an "overweight" rating on the stock.
Shares of the company were down $4.01 at $25.08 in morning trade on the New York Stock Exchange. (Reporting by Supantha Mukherjee in Bangalore; Editing by Himani Sarkar)
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