Wells Fargo Securities downgraded American International Group Inc to underperform, saying the company has virtually no tangible book value at the moment and that its shares are over priced.

Absent government support the company would be out of business and at present, the market value of AIG's businesses is less than its obligations to the government, analyst John Hall said in a note to clients.

He cut his valuation range on the company's stock to between $10 and $20 from his earlier view of between $21 and $29.

However, Hall said if AIG's businesses are collectively capable of repairing the company's balance sheet, then an auction process of core assets is ill-advised.

He believes asset sales would lock in lower current valuations and potentially limit the ultimate proceeds recognized from asset sales.

The analyst upgraded reinsurer PartnerRe Ltd to outperform from market perform, citing expectations of strong third-quarter earnings and benefits from its acquisition of smaller rival Paris Re.

PartnerRe should benefit from having a larger size, scale, and greater diversity following its merger with Paris Re, Hall said.

He raised his valuation range on the company's stock to between $86 and $92 from his prior view of a range of $68 to $73.

The reinsurer's earnings should benefit from the lack of large catastrophe losses and reserve releases, he added.

AIG's shares were down 45 cents to $37.40 in trading before the bell on Friday. PartnerRe's shares closed at $71.79 on Thursday on the New York Stock Exchange. (Reporting by Brenton Cordeiro in Bangalore; Editing by Anil D'Silva)