UPDATE: Compass Point Downgrades AmTrust Financial Services Ahead Of Earnings Report

In a report published Wednesday, Compass Point analyst Ken Billingsley downgraded the rating on AmTrust Financial Services AFSI from Buy to Neutral, but reiterated the $52.00 price target. In the report, Compass Point noted, “We are lowering our rating on AFSI to Neutral from Buy and maintaining our price target of $52. Our lowered rating is based on the recent meteoric rise of AFSI shares in the past month. The company reports earning next week (November 4Th before the market opens) and we expect the company to report solid results stemming from recent acquisitions and improving premium levels and higher fee income offset by a rising combined ratio. While the current pricing environment for AFSI's core Workers' Comp line remains a bright spot within the P&C industry, we believe the pricing metrics surrounding the current share price belay the overall trends in the P&C space. AFSI currently trades at 4.8x its 2Q14 diluted TBVPS of $11.14 with an ROATE of 47.1%.” AmTrust Financial Services closed on Tuesday at $53.03.