NEW YORK (
and removed the company from its recommended list.
Analyst Keith Walsh downgraded the company to "2M" , which translates to a hold/medium risk weighting, from "1M"," or a buy/medium risk grade. He explained the downgrade was the result of projections that the company will continue buybacks as part of its strategy, which could keep Travelers from reaching Citi's target price of $55.
, "Since the end of 2005, TRV has repurchased 254.4M shares ($12.6B) or roughly 36% of the shares outstanding; share repurchases at below book value are immediately accretive to BVPS, EPS and ROE. We estimate this will continue increasing through 2010 before beginning to taper off in 2011. Since 2005 TRV's book value per share has increased at a 13% CAGR (ex. OCI it has increased a 12% CAGR). Management has demonstrated they are focused on book value creation, which is the underlying driver of value for insurance underwriters."
--Written by Maria Woehr in New York.
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