UPDATE: Citigroup Initiates Hartford Financial Services at Buy on Catalysts

Citigroup initiated coverage on Hartford Financial Services Group, Inc. (The) HIG with a Buy rating and a $27.00 price target. Citigroup commented, "We view HIG as a compelling turnaround story with several potential catalysts to unlock value. Over time, we see significant potential upside as returns in the company's core business improve and the runoff block shrinks, freeing up capital for share repurchases and dividends. … Based on our sum-of-the-parts model, we estimate HIG's runoff VA block is being valued at $500M-$1.4B, or <2x GAAP operating earnings and 0.2-0.4x statutory capital. At the current price, we believe investors are buying a solid core business with a call option on the VA block." Hartford Financial Services closed at $23.85 on Wednesday.