UPDATE: Citigroup Lowers PT on Reinsurance Group of America Following Model Update

In a report published Wednesday, Citigroup analyst Erik J. Bass reiterated a Neutral rating on Reinsurance Group of America RGA, but lowered the price target from $73.00 to $71.00.

In the report, Citigroup noted, “We are lowering our target price on RGA due to 1) a lower 2Q14 book value estimate following the $184M after-tax reserve charge for the Australian business, and 2) a modestly lower assumed multiple given the company's earnings volatility and the risk of additional charges. Our new target price assumes a 1.0x multiple on book value (ex. AOCI) and 9.0x multiple on our 2014 EPS estimate. These compare to our average assumed group multiples of 1.1x and 9.8x, respectively.”

Reinsurance Group of America closed on Tuesday at $66.58.