UPDATE: Credit Suisse Initiates Validus Holdings at Outperform; Stock Undervalued

Credit Suisse initiated coverage on Validus Holdings

with an Outperform rating and a $42 price target. Credit Suisse commented, "We believe the stock is currently undervalued by 25% owing to the following four reasons:  We foresee VRc ontinuing to grow its joint venture platform over the next 12 months, which we believe is an ROE-accretive revenue source.  Our capital analysis points to VR having an excess capital position equal to at least 6% of shareholders equity after taking into account an expected $148m payment for the recently announced Flagstone acquisition.  VR has an attractive dividend yield (3.0%), which we believe has ample room for growth given its peer leading 13.3% ROE profile relative to its current peer average dividend payout ratio." Validus Holdings closed at $33.42 on Wednesday.