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Connecticut-based The Hartford Insurance Group, Inc. (HIG) is one of the major multi-line insurance and investment companies in the country, providing investment products, group life and group disability insurance, property and casualty (P&C) insurance, and mutual funds in the U.S. The company is valued at a market cap of $32.5 billion.
Shares of this insurance company are fairly in line with the broader market over the past 52 weeks. HIG has soared 22.4% over this time frame, while the broader S&P 500 Index ($SPX) has gained 22.3%. However, on a YTD basis, the stock is up 2.4%, lagging behind SPX’s 4% rise.
Narrowing the focus, Hartford has underperformed the Financial Select Sector SPDR Fund’s (XLF) 32.5% return over the past 52 weeks and a 7.2% gain on a YTD basis.
On Jan. 30, HIG released its Q4 earnings results, and shares of Hartford plunged 2.4% the following day. On the brighter side, the company’s Property & Casualty (P&C) written premiums increased 7% in the quarter, driven by robust Commercial and Personal Lines premium growth. Moreover, a higher investment portfolio yield and continued strong margins in Group Benefits aided the results.
However, on the downside, HIG reported core earnings of $2.94 per share, which decreased 3.9% from the year-ago quarter. Additionally, it increased its general liability reserves by $130 million before tax due to increased settlement costs and higher attorney representation rates. The company is also closely monitoring potential losses from the California wildfires, which could impact its reinsurance programs. These factors might have raised investor concerns and led to the stock’s downward price movement.
For the current fiscal year, ending in December, analysts expect HIG’s EPS to grow 7.9% year over year to $11.11. The company’s earnings surprise history is mixed. It topped the Wall Street estimates in three of the last four quarters while missing on another occasion.
Among the 22 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on nine “Strong Buy,” two “Moderate Buy,” and 11 “Hold” ratings.
This configuration is slightly more bullish than three months ago, with eight analysts suggesting a “Strong Buy” rating.
On Feb. 5, Keefe Bruyette maintained an “Outperform” rating on HIG and raised its price target to $140, which indicates a 25% potential upside from the current levels.
The mean price target of $127.70 represents a 6.4% upside from Hartford’s current price levels, while the Street-high price target of $150 suggests an upside potential of 34%.
