Travelers stock price target lowered to $302 by Goldman Sachs

Investing.com - Goldman Sachs lowered its price target on Travelers (NYSE:TRV) to $302.00 from $320.00 while maintaining a Buy rating following the insurer’s third-quarter earnings. The new target still suggests significant upside potential, with InvestingPro data showing the stock currently trades at an attractive P/E ratio of 10.6x and maintains a "GREAT" overall financial health score.

The firm increased its earnings per share estimates for 2025, 2026, and 2027 by 4%, 3%, and 3% respectively, citing favorable revisions in share repurchases and Personal Insurance margins. The largest driver of the improved estimates was an approximately 2.5 percentage point improvement to Home Insurance underlying loss ratios in 2026 and 2027. This optimistic outlook aligns with InvestingPro data showing 16 analysts have revised their earnings upward for the upcoming period. For deeper insights into Travelers’ financial health and growth prospects, check out the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In Business Insurance, Goldman Sachs weakened its estimate for the 2026 and 2027 underlying loss ratio by 20 and 40 basis points to 59.2% and 59.9%, respectively, reflecting an updated view of pricing following quarterly pricing that was approximately 50 basis points weaker than expected.

Despite modeling for 35% greater share repurchases than consensus in 2026 and 2027, the firm sees capacity for Travelers to return close to twice more capital to shareholders than currently modeled in those years.

Goldman Sachs continues to prefer Travelers amongst Commercial carriers, citing lower downside to growth estimates and greater upside to margins, driven by higher and more stable U.S. SMID pricing and elevated levels of RPC in the Home business. The company’s strong fundamentals are reflected in its 8.5% revenue growth and consistent dividend payments, which it has maintained for 23 consecutive years. According to InvestingPro analysis, Travelers currently appears undervalued relative to its Fair Value, suggesting potential upside for investors.

In other recent news, Travelers Companies reported strong third-quarter 2025 earnings, exceeding expectations with earnings per share (EPS) of $8.14. This result surpassed the forecast of $6.15, while revenue also outperformed projections, reaching $12.47 billion compared to the anticipated $11.75 billion. The positive earnings were driven by better-than-expected underwriting results, particularly in the homeowners’ business segment. Following these results, BofA Securities raised its price target for Travelers to $265.00 from $259.00, although it maintained an Underperform rating on the stock. Despite the earnings beat, the stock experienced a decline, which was noted in pre-market trading. These developments highlight the company’s recent financial performance and the mixed reactions from the market and analysts.

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