Citi Reiterates Neutral Rating on Travelers (TRV)

Citi analyst Michael Ward reiterated a Neutral rating and $226.00 price target on Travelers (NYSE: TRV).

The analyst commented, "While our initial reaction to TRV’s print was for modest underperformance, our view is the stock’s HSD decline today reflects crowdedness in commercial P&C + investors’ casualty reserve fears. Ultimately, we believe less confidence in favorable development embedded in consensus Business Insurance (BI) expectations is reasonable (est. ~1pt of releases ex-annual A&E review in 3Q currently embedded), outweighing better BI underlying loss ratios. Still, there were notable positives, including: 1) solid comm’l pricing; 2) underlying loss ratio improvement in BI+Personal Insurance (PI) underlying strength; 3) materially lower BI paid/incurred ratio (implying building reserving cushion). Either way, we believe some caution makes sense given: 1) our reserve work points to TRV not increasing GL IBNR as much as peers in 2023 for recent accident years; and 2) TRV’s weaker workers’ comp growth since the pandemic points to it having fewer favorable levers to pull."

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

Shares of Travelers closed at $206.58 yesterday.

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