Stifel Nicolaus reduced its rating on Markel Corporation MKL from Buy to Hold and removed its $550 price target.
Stifel Nicolaus commented, "We are downgrading the shares of Markel to Hold from Buy following its announced acquisition of Alterra (ALTE: $28.18, Not Covered). We think Markel's own overwhelmingly positive long-term underwriting track record challenges the cited benefits of increased diversification, product depth, and leadership positions. We're concerned about integration-related distractions in general, and the prospect of less-favorable reserve development in particular, likely limiting near-term book value creation. Long term-focused investors can rely on Markel's proven ability to re-underwrite books of business over time, but the near-term outlook seems too uncertain to warrant a Buy rating."
Markel Corporation closed at $436.24 on Wednesday.
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