Deutsche Bank Initiates Coverage With A Buy Rating On Transatlantic (TRH)

Deutsche Bank has initiated coverage of Transatlantic (NYSE: TRH) with a "buy" rating and a price target of $53.00.

The analysts at Deutsche Bank noted, “The company's unique status as a pure-play onshore U.S. reinsurer remains its greatest differentiator. If protectionist legislative were signed into law, we believe that Transatlantic would stand to benefit. However, offshore third-party reinsurers would also benefit and would retain their tax-preferred status, which we believe is particularly beneficial in property-catastrophe reinsurance where pricing currently appears most adequate and where Transatlantic wishes to expand.”

Furthermore, analysts are concerned about the AIG legacy, given that AIG continues to be TRH’s largest consumer. Both companies use each other’s licensing to acquire risk. Analysts added, “Given the reserve charges taken at AIG, we believe Transatlantic's reserve positions, where its Other Liability business has developed unfavorably for eight consecutive years, requires vigilant monitoring.”

Shares of THR finished lower today by 25 cents, or 0.52%, to $47.38.