Skip to main content

Market Overview

Insurance Stocks May Have Risen Too Far Too Fast

Insurance Stocks May Have Risen Too Far Too Fast

Randy Binner of FBR Capital Markets has downgraded Metlife Inc (NYSE: MET), Hartford Financial Services Group Inc (NYSE: HIG) and Maiden Holdings, Ltd. (NASDAQ: MHLD) to Market Perform, saying the risk/reward for these stocks have become less attractive after the election rally.

Following Donald Trump’s win, Binner said, on average, life names have climbed 15 percent, property/casualty have risen 11 percent and mortgage insurers have advanced 7 percent.

The rally was attributed to the higher rate environment, potential benefit from a lower corporate tax rate and the benefit of deregulation.

Insurance Rally Specifics

“In general, our analysis indicates that insurance stocks have factored in many of these potential benefits. The challenge, of course, is that yields could again move lower, and tax reform and deregulation are not certain,” Binner wrote in a note.

On Metlife, Binner said his analysis shows shares efficiently discounting spread, tax and deregulation factors post-election, while the upcoming spin catalyst and associated buyback are now better priced into shares.

On Hartford, the post-election rally has put shares close to FBR’s $47 price target, while Maiden shares jumped 17 percent despite seen only marginally benefiting from higher rates.

“Given its Bermuda domicile, the name does not see much potential tax benefit, nor a benefit from deregulation. MHLD is trading at 92 percent of its five-year min/max P/E valuation,” Binner continued.

Under-Discounted Stocks

The analyst said the following stocks have under discounted the benefit of the post-election environment:

  • AFLAC Incorporated (NYSE: AFL).
  • Allstate Corp (NYSE: ALL).
  • AmTrust Financial Services Inc (NASDAQ: AFSI).
  • MGIC Investment Corp. (NYSE: MTG).
  • NMI Holdings Inc (NASDAQ: NMIH).
  • Progressive Corp (NYSE: PGR).
  • Radian Group Inc (NYSE: RDN).
  • Travelers Companies Inc (NYSE: TRV).

Analyst's Changes

Further, Binner raised the price targets of the following companies.


Latest Ratings for AFL

May 2021Morgan StanleyMaintainsOverweight
Apr 2021Morgan StanleyMaintainsOverweight
Apr 2021UBSInitiates Coverage OnNeutral

View More Analyst Ratings for AFL
View the Latest Analyst Ratings


Related Articles (AFSI + AFL)

View Comments and Join the Discussion!

Posted-In: Analyst Color Long Ideas News Short Ideas Downgrades Price Target Reiteration Analyst Ratings Best of Benzinga

Latest Ratings

SVLake StreetInitiates Coverage On20.0
CLSDJMP SecuritiesMaintains9.0
WPCJP MorganUpgrades88.0
BRKRCleveland ResearchUpgrades
NTRRaymond JamesDowngrades82.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at