AFG Bulls Hold Target Edge as Q2 Results Land

American Financial Group delivers its Q2 results today with the same calm lending backdrop described heading into the original August 4 date — and nothing in the positioning data has shifted materially since then.

Borrow conditions remain exceptionally loose. Availability is running at roughly 9,300%, meaning shares available to lend still dwarf those actually borrowed by a factor of nearly 100. Cost to borrow has ticked up about 17% over the past week to 0.60%, but that move leaves it well below any level that implies squeeze pressure. Short interest, at 2.2% of the free float, has been essentially flat for two weeks after falling roughly 9% over the prior month. Options traders are similarly unbothered: the put/call ratio of 0.23 is barely above its 20-day average of 0.23, with a z-score near zero. AFG closed at $140.60 on Tuesday, down about 1% on the day and around 3% on the week — softening modestly but without any sign of accelerated repositioning.

The analyst divide is the more interesting story heading into the print. Wells Fargo remains the most constructive voice, having raised its target to $173 earlier in July while holding an Overweight rating — implying roughly 23% upside from current levels. Keefe Bruyette lifted its target to $148, though it stayed at Market Perform. The bear case centres on downward EPS revisions — projections for 2025 and 2026 have been trimmed to $9.90 and $11.85 respectively — with higher anticipated loss ratios and reduced investment income doing the damage. Bulls counter that net written premium growth is on track, core loss ratios are expected to improve through the year, and AFG has historically outperformed the KBW Insurance Index through similar pricing cycles. The stock's trailing P/E near 12x and price-to-book of 2.1x keep valuation from being an obvious objection either way. Among peers, CB is down nearly 3% on the week and AXS has slipped more than 9%, suggesting the broader specialty insurance group has faced selling pressure — making AFG's relative stability marginally notable.

Today's print is therefore a test of whether the company's underwriting discipline and premium volume can absorb the loss-ratio headwinds that analysts have already baked into their reduced estimates — and whether management guidance for the second half is strong enough to close the gap between the current price and Wells Fargo's considerably more optimistic target.