UPDATE: Goldman Sachs Initiates Arch Capital Group at Neutral on Valuation
Goldman Sachs initiated coverage on Arch Capital Group (NASDAQ: ACGL) with a Neutral rating and a $43 price target.
Goldman Sachs noted, "The company has outperformed both in terms of stock price and book value growth over almost any historical period. However, we think that for Arch to justify its high valuation relative to peers it must generate higher returns than we estimate it will, and we note that above-normal book value growth (which appears to be the cornerstone of Arch's elevated valuation) is due in large part to investment items and buybacks, and is less a function of outsized underwriting results relative to Axis."
Arch Capital Group closed at $44.41 on Wednesday.
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