Upgrading to Neutral
TRV delivered a good Q4 result driven by healthy premium growth and lower-than-feared catastrophes. In addition, management commentary regarding the 2018 outlook was considerably more positive than we anticipated. Taking these factors into consideration, we have increased our EPS forecasts by ~10% in 2018 and 2019. Our valuation and price target increases to $150 (from $120) and we are upgrading TRV to a Neutral recommendation. Our main caveat is that some of the benefits of tax reform could be regulated away quite quickly. In addition, the valuation appears full at 1.7x BVPS but is now justified by the return to a rising ROE profile and an undemanding 12x FY19 EPS multiple.Travelers Companies is a holding company. Through its subsidiaries, the company is engaged in providing commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. The company's segments include: Business Insurance, which provides property and casualty insurance and insurance-related services; Bond and Specialty Insurance, which provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services, and certain specialty insurance products; and Personal Insurance, which writes property and casualty insurance covering individuals' personal risks.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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