KBW: We're Upgrading Chubb Corp

In a report published Friday, Keefe, Bruyette & Woods analyst Meyer Shields upgraded the rating on

from Underperform to Market Perform, with a price target of $92. The stock has been the "second worst' performer among large cap P&C insurers, year to date. "We view Chubb as one of the industry's highest-quality insurers. We attribute much of the underperformance to its former large valuation premium relative to its own historical averages, which we saw as vulnerable to disappointment as primary insurance rate increases subsided," Shields said. While the EPS estimates for 2015 and 2016 were maintained, the 2017 EPS estimate was introduced at $8.70, reflecting expectations of limited top line growth, modest increase in the core loss ration and a gradual fading of favorable reserve development, "offset by eventually-rising investment yields and steady share repurchases (about $1.3 billion annually in 2015-2017)," Kee, Bruyette & Woods reports stated.