Citi has raised its price target on shares of Hartford Financial Services (NYSE: NYSE:HIG) to $118.00, up from the previous $118.00, while maintaining a Neutral rating on the stock, based on an evaluation of the company's commercial lines growth and overall financial performance.
Hartford has been noted for its accelerating commercial lines growth, which stands out when compared to industry peers such as Chubb (NYSE:CB) Limited, The Travelers Companies (NYSE:TRV), and American International Group (NYSE:AIG), noted an analyst from Citi.
The company's small commercial and global specialty units have been identified as key drivers behind this growth. Additionally, Hartford's Group Benefits segment has been performing robustly, even after accounting for non-recurring benefits realized in the quarter.
Although Hartford's personal auto profitability has faced challenges, it is viewed as a potential area for improvement in 2025. The management's confidence in the sufficiency of workers' compensation reserves is seen as a positive sign, especially in light of a slight uptick in medical severity rates. Moreover, the company has managed to keep general liability deficiencies to a minimum, said the analyst.
Citi has increased its earnings per share (EPS) estimates for Hartford Financial Services for the years 2024, 2025, and 2026 by 4%, 2%, and 2% respectively. These revisions are attributed to stronger net investment income, higher commercial lines revenue, and improved core margins in the Group Benefits division. The revised price target also factors in a higher assumption for share repurchases following an increase in authorization. However, this is counterbalanced by an adjusted stock price assumption.
Meanwhile, Jefferies has raised its price target for Hartford to $113, maintaining a hold rating, based on revised earnings per share estimates for the years 2024 through 2026. On similar lines, Piper Sandler also showed a positive stance, raising its price target from $112 to $125, citing the company's strong group unit earnings which surpassed forecasts.
At the same time, RBC Capital Markets has also increased its price target for Hartford from $105 to $115, following the company's second-quarter results that exceeded expectations, particularly within its Group Benefits segment.
InvestingPro Insights
The recent price target upgrade by Citi for Hartford Financial Services aligns with several positive metrics and analyst sentiments captured in real-time data from InvestingPro. The company's strong financial performance is underscored by its Market Cap of $32.06 billion and a healthy P/E Ratio of 11.43, which is even more attractive when considering the adjusted P/E Ratio for the last twelve months as of Q2 2024 at 11.12. Additionally, the company's Revenue Growth over the same period stands at a robust 8.15%, reflecting its commercial lines growth and operational efficiency.
InvestingPro Tips highlight Hartford's financial stability and growth potential, with the company having raised its dividend for 11 consecutive years and maintained dividend payments for 29 consecutive years. This consistent return to shareholders is complemented by a Dividend Yield of 1.71% as of mid-2024. Moreover, with 7 analysts having revised their earnings upwards for the upcoming period, the outlook for Hartford remains positive.
For investors seeking more detailed analysis and additional insights, InvestingPro offers further tips on Hartford Financial Services, which can be accessed through InvestingPro's platform. Users can benefit from a special offer using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 13 more InvestingPro Tips available, providing a comprehensive view of the company's financial health and market position.
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