NEW YORK (TheStreet) -- The Travelers Companies (TRV) shares are up 0.5% to $104.78 in early market trading on Thursday after the insurance provider was downgraded to "neutral" from "buy" by analysts at UBS today.
The firm also raised the company's price target to $105 from $101 despite the downgraded outlook.
UBS made a valuation call on the company in downgrading its rating saying that its valuation looks full based on its current business fundamentals.
Yesterday, analysts at JPMorgan initiated coverage on the company's stock with a "neutral" rating and $100 price target.
TheStreet Ratings team rates TRAVELERS COS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TRAVELERS COS INC (TRV) 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, notable return on equity, solid stock price performance and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TRV's revenue growth trails the industry average of 21.9%. Since the same quarter one year prior, revenues slightly increased by 7.0%. Growth in the company's revenue appears to have helped boost the 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, TRAVELERS COS INC's return on equity exceeds that of both the industry average and the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- TRAVELERS COS INC has improved earnings per share by 16.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TRAVELERS COS INC increased its bottom line by earning $9.74 versus $6.27 in the prior year. This year, the market expects an improvement in earnings ($9.90 versus $9.74).
- You can view the full analysis from the report here: TRV Ratings Report