Zacks Investment Research upgraded shares of Tower Group Inc. (TWGP) from UNDERPERFORM to NEUTRAL on October 11, 2012, with a target price of $21.00.
We are upgrading our recommendation on the shares of Tower Group Inc. to Neutral' from Underperform' following the company's recent investment in Canopius, which is expected to enhance its Bermuda reinsurance business and accrue to overall profitability. We also view favorably the acquisitions made by Tower Group over the last few years, in order to diversify its business mix. Adequate loss reserves, solid capitalization, moderate leverage, strong operating performance and disciplined underwriting are some of the other positives. Some of the headwinds faced by the company are execution risk associated with the recent investment in Canopius. Other concerning factors include the still soft property and casualty market, intense competition and business concentration in northeast U.S.
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