Zacks Investment Research downgraded shares of The Travelers Companies Inc. (TRV) from OUTPERFORM to NEUTRAL on November 26, 2012, with a target price of $75.00.
We are downgrading Travelers to Neutral from Outperform as we remain concerned about its fourth quarter results being negatively affected due to the catastrophe loss owing to Superstorm Sandy. Travelers third quarter earnings outperformed our expectations due to lower catastrophe losses, sturdy underwriting results and solid investment income. Top line also surpassed our expectations, driven by the augmentation in premiums earned and net investment income. Based on a high retention rate, pricing gains, positive renewal rate changes, prudent underwriting practice, strong capital position and strong ratings, Travelers is poised to perform better going forward. Travelers' continuous share buyback strategy has a positive impact on earnings per share and also bolsters shareholder value. Also, the quarter experienced improvement in the debt capital ratio.
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