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Investing.com - Goldman Sachs raised its price target on Travelers (NYSE:TRV) to $320.00 from $312.00 on Monday, while maintaining a Buy rating on the insurance company following its strong second-quarter earnings. The insurance giant, with a market capitalization of $60 billion, is currently trading at an attractive P/E ratio of 11.6x. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward for the upcoming period.
The investment bank cited Travelers’ underwriting-driven earnings beat in Q2 2025 as the primary reason for adjusting its earnings per share estimates upward by 16% for 2025 (2% excluding the Q2 beat), and 5% for both 2026 and 2027. The company’s strong performance is reflected in its revenue growth of 8.54% over the last twelve months, with InvestingPro analysis suggesting the stock is currently undervalued based on its Fair Value assessment.
Goldman Sachs reiterated Travelers as its top pick among commercial underwriters, pointing to the company’s exposure to small and medium enterprise accounts, above-average reserve position, less severe upcoming business mix shift, and underappreciated tailwinds in personal lines. The company’s financial strength is evident in its "GREAT" overall health score from InvestingPro, which also highlights its 19-year streak of consecutive dividend increases.
The firm’s stronger EPS estimates primarily reflect a 2-3 percentage point improvement to its 2026/2027 Homeowners underlying loss ratio estimate, driven by the earn-in of over 19% year-to-date renewal premium change and favorable impacts from Travelers’ 2025 underwriting actions.
Goldman Sachs’ new price target of $320 represents a potential 22% total return for Travelers stock, though the firm noted it has modestly decreased its net premium written growth estimates in Business Insurance and Personal Auto due to pricing pressure and elevated competition.
In other recent news, Travelers Companies reported impressive financial results for the second quarter of 2025, significantly exceeding earnings expectations. The company posted earnings per share of $6.51, which was substantially higher than the forecasted $3.60, marking an 80.83% surprise. Revenue also surpassed expectations, reaching $12.12 billion compared to the anticipated $11.62 billion. Travelers announced the sale of its Canadian business for $2.4 billion, a strategic move aimed at optimizing capital allocation. Analysts at Citizens JMP reiterated a Market Perform rating on Travelers stock, acknowledging the insurer’s strong franchise but viewing the shares as fairly valued at the current levels. During the quarter, Travelers repurchased $557 million in shares, with a remaining authorization capacity of $4.29 billion. The company’s core return on equity was reported at 18.8%, indicating efficient use of shareholder funds. Travelers also saw growth in net written premiums by 5% to $11.5 billion, reflecting strong market performance.
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