UPDATE: Credit Suisse Initiates Coverage on XL Group plc with Outperform Rating, $41 PT as Catlin Deal Makes Financial Sense

In a report published Wednesday, Credit Suisse analyst Ryan Tunis initiated coverage on

with an Outperform rating and $41.00 price target. In the report, Credit Suisse noted, "We question the strategic rationale of the Catlin deal, given the competitive and structural headwinds in both property/cat reinsurance market and Lloyd's market, so we think that the combination deserves a lower multiple than the standalone XL. However, we are more optimistic from a financial perspective, with cost saves likely to come in above management's stated target and new efficiencies from the combined reinsurance program." XL Group plc closed on Tuesday at $36.80.