UPDATE: Credit Suisse Reiterates Outperform Rating, Raises PT on Chubb Corporation
In a report published Friday, Credit Suisse reiterated its Outperform rating on Chubb Corporation (NYSE: CB), and raised its price target from $80.00 to $84.00.
Credit Suisse noted, “With the exception of the Professional Lines segment, which still needs a couple quarters of rate increases (+9% currently) to get back to more reasonable profitability levels, margins were meaningfully improved and pricing levels remained in margin additive territory in an estimated 75-80% of Chubb's portfolio. Accident year margins improved a little more than we had expected, even when removing the benefit from low levels on ‘non-CAT' claims due to benign weather; therefore, our EPS run-rate increases 4.5% (recall we believe current pricing levels hold through 1Q'13), bringing our 2013 estimate to $6.44 (from $6.17). Accordingly, our target price rises to $84 (from $80), equivalent to 1.25x our NTM book value estimate (relative to a 10.0% 2013 ROE est.). We are also raising our 2012/2014 EPS estimates to $6.71/$6.64 (from $6.23/$6.42) respectively.”
Chubb Corporation closed on Thursday at $79.82.
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