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On Wednesday, Keefe, Bruyette & Woods analyst Meyer Shields adjusted the firm’s outlook on Travelers Companies Inc. (NYSE:TRV), upgrading the stock rating from Market Perform to Outperform. Accompanying this upgrade, the analyst also increased the price target from $275.00 to $286.00.
The decision to upgrade Travelers stock follows Keefe, Bruyette & Woods’ comprehensive year-end 2024 GAAP reserve analysis. Shields noted that the analysis revealed Travelers’ GAAP loss and ALAE reserves were likely overstated by approximately $1,388 million. This overstatement was attributed primarily to workers’ compensation, personal lines, and fidelity and surety redundancies, which exceeded deficiencies in general liability, particularly within the Bond & Specialty segment.
The analyst’s findings highlighted that Travelers’ calendar-year 2024 reserve development consisted significantly of workers’ compensation, personal lines, and fidelity and surety releases. These were partially balanced by reserve strengthening in the BI segment’s general liability and commercial multi-peril categories.
Shields’ analysis led to the conclusion that the overstatement in reserves could position Travelers more favorably, prompting the upgrade to an Outperform rating. The new price target of $286.00 is based on 11.5 times the firm’s estimated earnings per share (EPS) for 2026.
Travelers’ stock adjustment by Keefe, Bruyette & Woods reflects a positive reassessment of the company’s financial health and reserve management, particularly in areas that have shown significant releases. The upgraded rating and raised price target suggest a potential upside for investors based on the analyst’s projections.
In other recent news, The Travelers Companies, Inc. has estimated a preliminary pre-tax loss of $1.7 billion due to the California wildfires in January 2025, which stands at $1.3 billion after-tax. This figure reflects impacts across the insurer’s personal and commercial segments. The company’s Chairman and CEO, Alan Schnitzer, has affirmed Travelers’ commitment to aid in recovery efforts.
Meanwhile, financial services specialist Keefe, Bruyette & Woods has increased the price target for Travelers to $275, maintaining a Market Perform rating. The firm lowered its estimated earnings per share (EPS) for 2025 to $21.75, primarily due to the impact of the wildfires. However, its EPS forecast for 2026 was raised to $24.60.
Piper Sandler also shifted its stance on Travelers, upgrading the stock from Neutral to Overweight and raising the price target to $310. The firm raised EPS estimates above the consensus, forecasting $24.85 for 2025 and $26.30 for 2026. These recent developments reflect the ongoing analysis and adjustments by industry analysts in response to the company’s performance and market conditions.
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