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RBC Capital initiated coverage on Intact Financial Corp (TSX:IFC:CN) (OTC:IFCZF) with a Sector Perform rating and a price target of C$329.00 on Wednesday.
The financial services firm cited Intact’s "solid long-term track record of strong execution, and defensive attributes" as factors driving the company’s currently elevated valuation, which RBC believes is warranted.
RBC Capital noted that Intact is a core holding for many investors and will likely remain so, but the firm is "waiting for a better entry point" before recommending the stock more aggressively.
The research firm highlighted Intact’s strong position for potential acquisitions, pointing to approximately $3 billion in excess capital, a 20% leverage ratio, and a track record of achieving roughly 20% internal rate of return on prior underwriting acquisitions.
RBC also mentioned that Definity’s recently announced acquisition of Travelers (NYSE:TRV) could serve as "a catalyst for continued underwriter consolidation," with Intact well positioned to be "on the offensive" in this consolidation trend.
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