BMO Capital Upgrades PartnerRe (PRE) Two-Notches to Outperform

BMO Capital upgraded PartnerRe (NYSE: PRE) from Underperform to Outperform with a price target of $122.00, saying it has optionality to AXIS-PartnerRe merger.

Analyst Charles Sebaski commented, "We are upgrading shares of PartnerRe (PRE) to Outperform from Underperform and increasing our target price to $122 based on the company’s merger with AXIS. On December 8, 2014, we downgraded PartnerRe (PRE) to Underperform based on the argument that the reinsurance specialist would need to alter its business model due to a changing competitive landscape, and we thought investors should wait on the sidelines until after an announcement. We believe that time has come. The stock has underperformed peers and the broader market, dropping by more than 4.6% over the past several months as the company announced a large, transformative merger with AXIS on January 25. As the stock has gone on a bit of a roller-coaster ride over the past two months, we now see the time as right to take advantage of the positive optionality in shares of PRE, meaning whether 1) the AXS deal closes as described in the (S-4), 2) a new bidder for PRE emerges, or ). PRE shareholders vote down the deal with AXS. Given any of these outcomes, we would expect a positive stock return for PRE, and so we are recommending PRE shares as the better way to gain exposure to the AXS-PRE tie-up."

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

Shares of PartnerRe closed at $112.41 yesterday.

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