Story updated at 10:05 a.m. to reflect market activity.
Shares of Assured Guaranty were falling -1.2% to $22.93 in morning trading.
The analyst firm reiterated its "buy" rating for the company. The lower price target reflects a higher equity cost of capital due to fears of a Puerto Rico municipal debt default, according to UBA analysts Brian Meredith and Marie Lunackova.
"AGO shares declined 10% over the past two weeks over fears of a Puerto Rico ("PR") municipal debt default after the PR legislature passed "The Recovery Act," which provides a controlled way for PR's public corporations to restructure their debt (previously not legally available)," the analysts wrote. "AGO has $5.3bn of net par exposure ($8.3bn of debt service) to PR, of which $2.6bn is believed to be covered by The Recovery Act. UBS believes there is a high likelihood that the Puerto Rico Electric Power Authority ("PREPA") will seek to restructure its outstanding debt and others are likely to follow."
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Separately, TheStreet Ratings team rates ASSURED GUARANTY LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ASSURED GUARANTY LTD (AGO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, compelling growth in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."