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The Travelers Companies, Inc. (TRV), founded in 1853 and headquartered in New York City, is one of the largest providers of property and casualty insurance in the U.S. With a market cap of $54.7 billion, TRV offers a wide range of insurance products, including personal, business, and specialty coverages. The company is set to release its Q4 earnings before the market opens on Wednesday, Jan. 22.
Ahead of this event, analysts expect Travelers Companies to report a profit of $6.39 per share, down 8.8% from $7.01 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on another occasion.
In Q3, the company reported an EPS of $5.24, which topped the consensus estimates by 38.3%. Despite elevated catastrophe losses, the Travelers Companies' strong Q3 performance was driven by improved underwriting, higher investment income, and premium growth across all segments.
For fiscal 2024, analysts expect TRV to report EPS of $18.84, up 43.5% from $13.13 in fiscal 2023. Moreover, EPS is expected to grow 9.1% year over year to $20.55 in fiscal 2025.
TRV stock has climbed 25.8% over the past 52 weeks, outperforming the S&P 500 Index’s ($SPX) 23.7% gain but trailing the iShares U.S. Financial Services ETF’s (IYG) 29.9% rally during the same period.
TRV stock has recently lagged the broader market, facing challenges from increased competition in the insurance sector and the impact of higher interest rates on investment returns. Despite these pressures, the company showcased resilience with a strong Q3 earnings report on Oct. 17, which led to a 9% stock surge. Revenue rose 12% year-over-year to $11.9 billion, surpassing analysts' expectations, while the consolidated combined ratio improved by 7.8 points to an impressive 93.2%, highlighting better underwriting performance.
Analysts' consensus view on Traveler Companies’ stock is cautious, giving the stock a "Hold" rating overall. Out of 26 analysts covering the stock, seven advise a "Strong Buy," 14 indicate a “Hold,” one recommends a “Moderate Sell,” and four suggest a “Strong Sell” rating. The average analyst price target for TRV is $265.32, indicating a potential upside of 10.1% from the current levels.
