In a new report, analysts at Credit Suisse took an in-depth look at the property and casualty (P&C) insurance business and initiated coverage on several names in the space.
Here's a breakdown of what they had to say.
Soft Market
Analysts also predict average return on equity of 12 percent for the group in the next two years.
Defensive, Value-Driven Trading
While analysts see few business-related catalysts on the horizon to boost share prices in the near-term, they believe that several names in the space offer buying opportunities on other grounds. Analysts predict that excess capital on the balance sheets of many P&C insurers will continue to be returned to shareholders.
According to the report, maintenance of current capital return levels (70 to 130 percent of operating earnings) will continue to be a "key value driver" for stocks.
Stock Picks
Credit Suisse assigned an Outperform rating on the following stocks:
- Allstate Corp ALL
- Chubb Corp CB
- XL Group plc XL
- ACE Limited ACE
- Arthur J. Gallagher & Co. AJG
- Marsh & McLennan Companies, Inc. MMC
Credit Suisse issued Neutral ratings on these names:
- Travelers Companies Inc TRV
- Arch Capital Group Ltd. ACGL
- Progressive Corp PGR
- Willis Group Holdings PLC WSH
Credit Suisse initiated the following two names at Underperform:
- Aon Plc AON
- W.R. Berkley Corp WRB
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