MKM Partners Maintains a 'Buy' on Assured Guaranty (AGO); Buffett or Lehman?...Does it Matter if Demand Grows?

MKM Partners maintains a 'Buy' on Assured Guaranty (NYSE: AGO) price target of $28.00.

Analyst, Harry Fong, disputes reports that Berkshire Hathaway (Nasdaq: BRK.A) initiated the termination of $8.25B in credit default swaps, but still thinks it's possible Warren Buffett has become more negative on the Muni Bond Market. Irregardless of Buffett's views, Fong believes that sale was initiated by Lehman Bros. as it winds down it's business following the emergence of bankruptcy.

Fong said, "Mr. Buffett has grown more negative toward municipal debt than he was when he referenced potential hardships for municipalities in his 2009 shareholder letter, it could help drive demand for financial guaranty insurance, especially when considered in conjunction with the three California cities that recently filed for Chapter 9 bankruptcy protection. A little additional fear could translate into increased demand for AGO wraps."

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

Shares of Assured Guaranty closed at $13.92 yesterday.

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