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Will This Price Target Cut Hurt Allied World Insurance (AWH) Stock Today?

Stocks in this article: AWH

NEW YORK (TheStreet) -- Barclays lowered its price target on Allied World Insurance Co. Holdings (AWH) to $40 from $118 on Friday.

The firm said it lowered its price target on the specialty insurance and reinsurance company due to the decline in property catastrophe reinsurance prices.

Shares of Allied World Insurance were down -0.56% to $37.21 at today's opening.

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TheStreet Ratings team rates ALLIED WORLD ASSURANCE CO AG as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLIED WORLD ASSURANCE CO AG (AWH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • AWH's revenue growth has slightly outpaced the industry average of 8.1%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AWH's debt-to-equity ratio of 0.22 is very low, it is currently higher than that of the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 25.17% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AWH should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has significantly increased by 2133.73% to $303.10 million when compared to the same quarter last year. In addition, ALLIED WORLD ASSURANCE CO AG has also vastly surpassed the industry average cash flow growth rate of 4.33%.
  • 45.74% is the gross profit margin for ALLIED WORLD ASSURANCE CO AG which we consider to be strong. Regardless of AWH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AWH's net profit margin of 27.99% significantly outperformed against the industry.
  • You can view the full analysis from the report here: AWH Ratings Report
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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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