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Investing.com - BMO Capital lowered its price target on Travelers (NYSE:TRV) to $297.00 from $309.00 on Monday, while maintaining an Outperform rating on the insurance company. The $58.4 billion market cap insurer, currently trading at an attractive P/E ratio of 10.3x, is considered slightly undervalued according to InvestingPro Fair Value analysis.
The firm raised its earnings estimates for Travelers by 3% through 2027, citing the insurer’s aggressive share repurchase plans of approximately $2.9 billion, or about 5% of outstanding shares, through the first quarter of 2026. InvestingPro data shows nine analysts have recently revised their earnings estimates upward, supporting this optimistic outlook. Get access to the comprehensive Pro Research Report for deeper insights into Travelers’ financial health, which ranks as "GREAT" with a score of 3.29.
BMO Capital attributed the repurchase capacity to two main factors: significantly lower capital requirements needed to support decelerating top-line growth, and to a lesser extent, a benign hurricane season.
The price target reduction resulted from BMO lowering its price-to-book value multiple to 2.0x from 2.1x, despite improved earnings estimates. The firm noted that expected Business Insurance margin deterioration would be offset by improved personal lines margins.
BMO highlighted Travelers’ personal auto segment’s favorable re-estimation and development, along with a lower tariff impact in future years, plus the positive effects of the company’s homeowners’ terms and conditions changes, which have helped Travelers improve its underlying combined ratio for 11 consecutive quarters.
In other recent news, Travelers Companies reported impressive third-quarter 2025 earnings, with earnings per share (EPS) reaching $8.14, surpassing the forecast of $6.15. The company’s revenue also exceeded expectations, totaling $12.47 billion compared to the anticipated $11.75 billion. Following these earnings results, several analyst firms adjusted their price targets for Travelers. Keefe, Bruyette & Woods raised its price target to $305, while maintaining an Outperform rating, citing the company’s quarterly outperformance. Piper Sandler also increased its price target to $322, maintaining an Overweight rating, attributing the success to better-than-expected catastrophe losses and net investment income. Conversely, Goldman Sachs lowered its price target to $302 but increased its earnings per share estimates for the coming years, maintaining a Buy rating. BofA Securities raised its price target to $265, highlighting strong underwriting results in the homeowners’ business segment despite maintaining an Underperform rating. These developments reflect a range of perspectives on Travelers’ recent performance and future potential.
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