UPDATE: JP Morgan Downgrades PartnerRe to Underweight on Limited Upside, Valuation

JP Morgan reduced its rating on PartnerRe

from Neutral to Underweight and with a $75 price target. JP Morgan commented, "We believe the company's earnings and ROE outlook, and therefore stock prospects, are limited over the next 12 months. First, reinsurance demand trends remain lackluster, while secular trends are mixed. This is a headwind for top-line growth as well as any significant short-term improvements to operating leverage. Second, pricing trends in reinsurance will not likely be as strong as those in insurance, despite losses from Sandy, which could put the company at a disadvantage relative to hybrid peers. Third, the company's diversity could be a relative weakness financially near term, versus peers with shorter duration liability (better returns) and asset (less reinvestment headwinds) portfolios." PartnerRe closed at $81.86 on Wednesday.