Thursday, Credit Suisse upgraded Chubb Corp. (CB) shares to Neutral from Underperform, while lowering its price target to $52 from $57.
Analyst Misquith upgraded the stock due to a more reasonable valuation and reduced concerns about D&O losses. The analyst noted that he is getting more positive on commercial lines insurers due to attractive valuation. CB is trading at 1.04x fourth quarter of 2009 BVPS, the lowest it has traded in the last 20 years, despite an 11% forecasted 2010 return on equity, or ROE, which is in line with the historical average.
The analyst said that the stock's valuation has also declined over the last one year on a relative basis vs. the US P&C industry with CB now trading in line with the historical average premium of 10% to the group. During the last soft market and the first couple of years of the hard market, CB's premium valuation to the group increased vs. its historical average since the company is perceived as high quality and a safe haven.
The analyst lowered price target due to a general decline in valuations of peers and continued soft pricing in commercial lines. The $52 price target equates to 1.05 times 2010 fourth quarter BVPS and 9.9 times 2010 earnings, reasonable considering the high quality franchise and the 11% ROE in 2010. While the analyst expects commercial lines pricing to continue to be under pressure, he believes the current valuation discounts the bleak outlook and the substantial share repurchase program should act as a floor for the stock.
Currently, CB is up $0.95 or 1.97% and trading at $49.07.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.