Chubb Corporation's (CB) Increased Huatai Stake Could Cause Tangible Equity Write Down - Deutsche Bank

Deutsche Bank analyst Joshua Shanker reiterated a Sell rating and $133.00 price target on Chubb Corporation (NYSE: CB) noting that the company entered into series of transactions for various
stakes in Huatai Insurance – 4.7%, 15.3% and 7.1% which the analyst believes may have increased Chubb's stake in Huatai to 53.3% triggering a shift to consolidating results.

The analyst stated "Were Chubb to gain a majority stake in Huatai, we believe the company would need to change its accounting for the aggregate Huatai stake from equity-method to consolidation method. This change would lead Chubb to place the premium paid above equity value for the Huatai stake into its goodwill account, and we believe the majority of its investment in Huatai would be goodwill. While the 4Q19 transactions should lead to an equity value write-up, a change to consolidation-method accounting should lead to a tangible equity write-down (perhaps $4-5/share)."

For an analyst ratings summary and ratings history on Chubb Corporation click here. For more ratings news on Chubb Corporation click here.

Shares of Chubb Corporation closed at $155.99 yesterday.

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