While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of American International Group Inc (NYSE:AIG) gained about 2% in premarket trading Wednesday after Goldman Sachs upgraded the insurance giant from neutral to buy.

So what: Along with the upgrade, analyst Michael Nannizzi raised his price target to $63 (from $50), representing about 20% worth of upside to yesterday's close. So, while contrarian traders might be turned off by AIG's price strength during the past year, Nannizzi's call could reflect a sense on Wall Street that its growth prospects still aren't fully baked into the valuation.

Now what: According to Goldman, AIG's risk/reward trade-off is rather attractive at this point. "We believe AIG will generate SIFI-high capital and is best positioned among SIFI candidates to deploy capital accretively into its core businesses if large-scale buybacks are not a near-term option," said Nannizzi. "Our positive stance on AIG does not represent a more favorable view of regulation than we had previously held, but instead is based on our view that AIG's 'second best' deployment option is underappreciated by investors." Given AIG's still-cheapish price-to-book of 0.7, it's tough to disagree with that conclusion. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2016 $30 calls on American International Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.