NEW YORK (TheStreet) -- Shares of Travelers Companies (TRV - Get Report) are down -0.6% to $91.55 in pre-market trading after the insurance company was downgraded to "hold" from "buy" at Sandler O'Neill + Partners.
The firm changed its rating based on peak profitability and a potential turn in the insurance pricing cycle, but kept its price target of $101.
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- Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although TRV's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, TRAVELERS COS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: TRV Ratings Report