Travelers upgraded Strong Buy at Raymond James on 2023 earnings prospects (NYSE:TRV)

Exterior building for Travelers Insurance with red umbrella


Travelers (NYSE:TRV) stock is gaining 2.3% in Monday morning trading after Raymond James analyst C. Gregory Peters upgraded the insurer to Strong Buy from Market Perform as it’s poised to outperform on a relative basis.

The stock has risen 7.6% in the past year vs. the S&P 500’s decline of 10% during the same period as seen in this chart; the S&P 1500 Composite Property & Casualty Insurance Index, meanwhile rose 6.8%.

Specifically, Peters expects Travelers (TRV) Business Insurance segment’s record of renewal pricing exceeding loss costs for 11 of the last 13 quarters, combined with the company advanced risk selection tools, to fuel further improvements in underlying margins.

In addition, expectations it will implement additional auto and homeowners’ insurance rate increases over the next 12 months should drive Y/Y improvement in the Personal Insurance segment‘s underlying combined ratio beginning in Q2 2023.

“We believe Travelers (TRV) should be positioned to report results above consensus in 2H23 and 2024 due to previous and continuing rate actions in the Business Insurance and Business & Specialty Insurance segments, current and projected increases in the Personal Insurance segment and the impact of higher yields on net interest income,” Faucette said in a note to clients.

Faucette’s Strong Buy contrasts with the SA Quant rating of Hold and the average Wall Street rating of Hold.

SA contributor Power Hedge says Travelers (TRV) is still a good insurance play, though Q2 results showed weakness

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