UPDATE: Compass Point Upgrades Amtrust Financial Services to Buy on Improving ROAE

In a report published Thursday, Compass Point analyst Ken Billingsley upgraded the rating on Amtrust Financial Services AFSI from Neutral to Buy, and raised the price target to $38.00. In the report, Billingsley noted, “AFSI is an opportunistic acquirer of businesses that enhance and further reinforce the company's industry leading ROAE while generating industry leading combined ratios. The company operates in unique lines of business that are still maturing and in historical lines of business with a focus on customers that have a higher retention rate at policy renewal. In addition, the company enhances the returns for its underwriting operations by growing its homogeneous fee based business to serve its clients as well as outsourcing those services for a fee. Rising premium rates will further differentiate AFSI from its peers with regards to its loss ratio, which complements the company's already low expense ratio.” Amtrust Financial Services closed on Wednesday at $31.66.