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Investing.com -- Wall Street analysts initiated coverage on Aspen Insurance Holdings Ltd with a mix of positive and neutral ratings, highlighting the specialty insurer’s post-turnaround progress, improved underwriting performance, and positioning in a robust insurance pricing environment.
Jefferies and Citizens took bullish stances, launching with “Buy” and “Market Outperform” ratings, respectively. Jefferies set a $42 price target, citing “stable/improving” return on equity, reduced catastrophe exposure, and higher investment income.
Citizens assigned a $45 target and noting that Aspen was well positioned to take full advantage of prevailing hard market conditions across specialty insurance and reinsurance lines.
Aspen has reduced its 1-in-250 year catastrophe PML from 19.3% of equity to 9.8%. Citizen analysts say strategic changes since Apollo’s 2019 acquisition, including exits from 17 underperforming lines, have driven “significant margin improvement.”
Wells Fargo (NYSE:WFC) initiated coverage at Equal Weight with a $37 price target, calling shares “fairly valued” after a 14% gain since the company’s May IPO.
The firm expects Aspen to deliver ROEs in the mid-teens, in line with company targets, but said current valuation already reflects much of the turnaround.
Goldman Sachs started coverage at Neutral with a $38 target, citing positive views on Aspen’s underwriting strategy and capital markets fee income but warning of “negative pricing pressures on ~50%” of revenue and the recent nature of its operational transformation.
The bank sees potential for a valuation re-rating if Aspen can deliver lower volatility and sustainable returns.
Aspen shares trade at about 1.2x book value and 7x estimated 2026 EPS, below peer medians, according to Citizens, who argue the valuation gap may close as execution continues.