Travelers (TRV) Reiterated at Market Perform by Citizens: EPS Well Above Estimate

Citizens analyst Matthew Carletti reiterated a Market Perform rating on Travelers (NYSE: TRV).

The analyst commented, "Travelers reported operating EPS of $11.13, well above our estimate of $8.92 and consensus of $8.76. The beat versus our estimate was driven by better-than-projected reserve development ($321 mln favorable vs. $65 mln favorable est.; $0.90 beat), lower-than-projected catastrophe losses ($95 mln vs. $317 mln est.; $0.78 beat), lower-than-projected accident year ex.cat loss ratio (53.9% vs. 55.5% est.; $0.48 beat) and higher NII ($1,054 vs. $1,009 mln est.; $0.16 beat). Book value was up +7% sequentially to $151, above our estimate and consensus of $147. During the quarter, Travelers repurchased $1.65 bln of shares (vs. our $1.30 bln estimate). At January 1, Travelers renewed its corporate catastrophe XOL reinsurance treaty with the highlight being a reduction in retention to $3 bln for 2026 from $4 bln during 2025 (see Figure 2). As of December 31, Travelers had $2.015 bln of capacity remaining under its current share repurchase authorization as well as an additional $5 bln in new authorization just approved by the Board. Travelers is a well-managed and disciplined underwriter, in our opinion, with one of the strongest franchises in the P&C insurance sector. However, we view the shares as fairly valued at the current 1.8x book value and ~10x 2026E EPS, with expectations for an ~17% ROE in 2026, and thus reaffirm our Market Perform rating."

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 $272.65 yesterday.

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