UPDATE: Drexel Hamilton Initiates Buy, $64 Target on The Travelers

Drexel Hamilton initiates its coverage on The Travelers

with a Buy rating and a $64 target price as the company starts to aggressively raise rates in both personal and commercial lines, driving premiums higher. Drexel Hamilton notes, "Premium growth precedes earnings growth, so if higher rates prevail we can expect better premiums to drive future earnings. A reduced level of catastrophe losses would also boost earnings. As an industry leader and a large cap Dow 30 stock, Travelers has the potential to be an early mover among the financials. It should benefit from any recovery in the U.S. economy, as premium growth will also track with GDP. We estimate operating EPS of $5.77 and $6.30 for 2012 and 2013, respectively." TRV closed at $58.30 a share on Wednesday.