Raymond James lifts Hartford stock target to $135; keeps Outperform

Published 31/03/2025, 10:56
Raymond James lifts Hartford stock target to $135; keeps Outperform

On Monday, Raymond (NSE:RYMD) James analyst Gregory Peters updated the firm’s outlook on Hartford Financial Services (NYSE:HIG), raising the price target to $135 from the previous $125, while maintaining an Outperform rating on the company’s shares. This adjustment reflects a positive stance on Hartford’s potential to produce higher Return on Equity (ROE) compared to its peers through 2026, as well as an attractive stock valuation with an estimated 2025 P/E ratio of 11.5x, which is below the peer average of 13.5x. The company, currently valued at $34.88 billion, trades at a P/E ratio of 11.64x and has demonstrated strong financial health, earning a "GREAT" rating according to InvestingPro metrics.

The revised price target and maintained Outperform rating come after Peters’ review of Hartford’s recent management commentary and industry trends. The analysis included updates to several model assumptions, particularly regarding the company’s underlying Combined Ratio (CR) and Prior Year Development (PYD) across different segments. Adjustments were also made to the Group Benefits core income margin to account for seasonal trends. InvestingPro data reveals that Hartford has raised its dividend for 12 consecutive years, demonstrating consistent shareholder returns. The stock is currently trading near its 52-week high of $124.90.

Furthermore, Peters introduced a cautious approach to the Hartford Funds core earnings projections, acknowledging the impact of market volatility on the investment subsidiary of Hartford. This caution is reflected in the revised operating Earnings Per Share (EPS) estimates for 2025 and 2026, which have been lowered to $10.65 and $12.30, respectively, from the previous estimates of $10.85 and $12.50.

Despite the reduction in EPS estimates, the analyst’s outlook for Hartford remains positive, with expectations for mid to high single-digit Net Written Premium (NWP) growth, stable underlying combined ratios, and core Return on Beginning Equity (ROBE) exceeding 18% through 2026. Peters’ analysis underscores the company’s strong fundamentals and the potential for sustained financial performance in the coming years.

In other recent news, Hartford Financial Services Group reported its fourth-quarter 2024 earnings, with an earnings per share (EPS) of $2.94, exceeding analyst expectations of $2.67. However, the company reported a slight revenue shortfall, bringing in $6.89 billion compared to the forecasted $6.91 billion. The company’s Commercial Lines segment contributed significantly, with core earnings of $665 million, supported by strategic investments in technology and data science. Jefferies recently revised its price target for Hartford Financial, lowering it to $118 from $121, while maintaining a Hold rating. This adjustment followed the company’s fourth-quarter results, which highlighted adverse reserve developments for several accident years. Hartford Financial’s management remains confident in their reserve adequacy and strategic actions, despite challenges such as moderating Group Benefits margins and potential impacts from catastrophic events like the California wildfires. The company’s strategic focus is on maintaining strong underwriting practices and leveraging commercial growth initiatives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.