Market Overview

Deutsche Bank: 5 Reasons To Sell Chubb Shares

Deutsche Bank: 5 Reasons To Sell Chubb Shares

Chubb Ltd (NYSE: CB) reported better than expected second-quarter earnings July 24 and declared quarterly dividend of 73 cents Aug. 9. It is payable on Oct. 12 to shareholders of record at the close on Sept. 21.

The Analyst

Deutsche Bank's Joshua Shanker downgraded Chubb from Hold to Sell and decreased the price target from $135 to $126.

The Thesis

In the wake of the Q2 print, Shanker said he concluded the market is misunderstanding several aspects of the insurance company. (See the analyst's track record here.)

They are: 

  • Shanker doubts post-merger Chubb's ability to grow its business at the same rate as its peers. 
  • It's uncertain whether one-time items can deliver earning surprises.
  • The analyst sees a trend of decline in net favorable prior-period development.
  • Chubb is unlikely to maintain market peak underwriting margins.
  • The consensus EPS forecast is too high and will be revised down as it has been in the past, the analyst said. 

Price Action

Chubb was down 1.39 percent at the close at $133.11 Tuesday. 

Related Links:

10 Biggest Price Target Changes For Tuesday

Benzinga's Top Upgrades, Downgrades For August 14, 2018

Latest Ratings for CB

Feb 2019Credit SuisseDowngradesNeutralUnderperform
Feb 2019Raymond JamesMaintainsOutperformOutperform
Jan 2019Compass PointInitiates Coverage OnBuy

View More Analyst Ratings for CB
View the Latest Analyst Ratings

Posted-In: Deutsche Bank Joshua ShankerAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga


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