Citizens JMP reiterates Market Perform rating on Travelers stock

Investing.com - Citizens JMP analyst Meyer Shields reiterated a Market Perform rating on Travelers (NYSE:TRV) following the insurer’s better-than-expected second-quarter results. According to InvestingPro data, Travelers, with a market capitalization of $59.88 billion, has demonstrated strong financial health with 8 analysts recently revising earnings estimates upward.

Travelers reported operating earnings per share of $6.51, significantly exceeding both the analyst’s estimate of $3.62 and the consensus estimate of $3.66. The company achieved a core combined ratio of 91% versus the expected 99%. This performance aligns with the company’s track record of profitability, trading at an attractive P/E ratio of 11.75x while maintaining solid revenue growth of 8.54% over the last twelve months.

The earnings beat was driven by lower-than-projected catastrophe losses of $927 million compared to estimates of $1,326 million, primarily from severe wind and hail storms across multiple states. The insurer also reported better-than-expected reserve development of $315 million favorable versus estimates of $54 million favorable.

Book value increased 5% sequentially to $131, surpassing estimates of $126-128. During the quarter, Travelers repurchased $557 million of shares, more than double the analyst’s $250 million estimate, with $4.29 billion of capacity remaining under its share repurchase authorization as of June 30.

Despite acknowledging Travelers as "a well-managed and disciplined underwriter" with "one of the strongest franchises in the P&C insurance sector," Citizens JMP views the shares as fairly valued at the current 2.0x book value and 10x 2026 estimated EPS, with expectations for a 17% return on equity in 2026.

In other recent news, Travelers Companies reported strong financial results for the second quarter of 2025, significantly surpassing earnings expectations. The company achieved an earnings per share (EPS) of $6.51, greatly exceeding the forecasted $3.60, which marks an 80.83% surprise. Revenue also came in higher than anticipated, reaching $12.12 billion compared to the expected $11.62 billion. Travelers announced the sale of its Canadian business for $2.4 billion, a move aimed at optimizing capital allocation and enhancing shareholder value. Analysts noted that this strategic sale is expected to support future growth and potentially boost earnings per share in the coming years. In addition to these developments, Travelers experienced robust core income growth, reaching $1.5 billion, and saw a 5% increase in net written premiums to $11.5 billion. The company’s after-tax net investment income also rose by 6% to $774 million. These recent developments reflect Travelers’ strong operational performance and strategic initiatives to strengthen its market position.

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