Deutsche Bank Downgrades Reinsurance Group of America (RGA) to Hold
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Deutsche Bank downgraded Reinsurance Group of America (NYSE: RGA) from Buy to Hold with a price target of $112.00 (from $108.00). The downgrade was tied to valuation.
Analyst Yaron Kinar said, "We are downgrading our recommendation to Hold. The 30% YTD return on RGA shares far exceeds the 7% returns of the life insurance group and 6% returns for the S&P 500 and RGA shares' valuation (1.2x P/B; 11.3x P/E) relative to both the group and market is above historical averages at a time when the defensive play may have run its course. We continue to expect mid-to-high single-digit top-line growth and stable margins but believe that those are more appropriately priced in at this time, noting 4 upwards revisions and a 6% increase to FY16 Consensus over the past 90 days. We raise our TP to $112 to reflect a one-quarter roll forward and market stabilization."
Shares of Reinsurance Group of America closed at $110.03 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Downgrades
Related EntitiesDeutsche Bank, Standard & Poor's
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