Corebridge Financial (CRBG) Plunges 8.39% on Morgan Stanley Downgrade Amid Spread Compression Concerns

The share price of Corebridge Financial (CRBG) fell to its lowest level since April 2025 on Nov. 18, with an intraday decline of 6.28%. The stock has now lost 8.39% over three consecutive sessions, marking its weakest point in over a year. The selloff followed a downgrade from Morgan Stanley, which cut its rating to Equalweight from Overweight and lowered the price target to $33 from $39. The move reflects growing concerns over spread compression and the company’s ability to navigate a challenging interest rate environment.

Morgan Stanley highlighted spread compression as a critical risk, noting that Corebridge’s net interest margin is vulnerable to the Federal Reserve’s anticipated rate-cutting cycle. The firm’s Q3 2025 earnings underscored this pressure: while revenue exceeded expectations by 15.61% to $5.63 billion, earnings per share fell short by 12.73% at $0.96. Management acknowledged that spread compression is likely to persist through 2026, complicating efforts to offset revenue declines through asset optimization or non-interest income diversification.

Adding to investor uncertainty, American International Group (AIG) executed a secondary offering of 32.6 million Corebridge shares at $31.10 apiece, raising $1 billion. While the transaction could enhance liquidity, it also raises dilution risks for existing shareholders. With the Fed’s rate trajectory remaining a wildcard, Corebridge’s 3.3% dividend yield and 16.36 P/E ratio suggest a stock trading near fair value but facing structural headwinds. Analysts have revised earnings forecasts downward, signaling a shift in sentiment as macroeconomic pressures and operational challenges converge.