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Compass Point Reiterates Neutral on Argo Group (AGII) Despite Low CAT Activity

October 5, 2015 7:03 AM EDT
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Price: $58.85 --0%

Rating Summary:
    4 Buy, 5 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
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Compass Point reiterated a Neutral rating and $55.00 price target on Argo Group International (NASDAQ: AGII) despite a quarter of low CAT activity.

Analyst Ken Billingsley commented, "Lowering estimates for 3Q15 and maintaining Neutral rating. Despite a quarter of low CAT activity, there were enough attritional losses during the quarter to offset the benefit. While those two items may be a wash during the quarter, the company generally reviews its asbestos & environmental (A&E) exposure in the third quarter of each year. The last two years produced adverse development of $9.7M and $10.6M in 3Q13 and 3Q14 respectively. Our model adjustments include 1) increased estimate for A&E development to $8M for the current quarter, 2) normalized our accident year loss ratio for the E&S and International Specialty segments, 3) increased tax rate to 20% based on company guidance. The tax adjustment was carried forward to our 2016 EPS estimates as well as an increase to our 3Q16 A&E loss development."

For an analyst ratings summary and ratings history on Argo Group International click here. For more ratings news on Argo Group International click here.

Shares of Argo Group International closed at $57.78 yesterday.



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