Shares of Travelers Companies (TRV) are up 7% after the U.S. insurance provider posted third-quarter financial results that beat Wall Street forecasts and announced that its premiums reached record levels.
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The auto and home insurer reported earnings per share (EPS) of $5.24, which beat the $3.66 consensus forecast of analysts who track the company’s progress. Revenue in the July through September quarter totaled $11.90 billion, which topped a forecast of $11.46 billion.
Travelers said that its results benefitted from record premiums paid to the company during the period. Net earned premiums, a metric used by insurers that refers to money that’s already been collected, reached a record $10.7 billion.
Insurance Costs on the Rise
Management said that the firm is benefitting as individuals and businesses spend more money on insurance. The company’s premiums rose 8% in the quarter from a year earlier as both its home and auto insurance units grew.
Travelers isn’t alone in hiking the costs of its insurance premiums. A report this summer from Bankrate said that the average premium for full-coverage auto insurance in the U.S. had risen 26% year-over-year through the end of June.
However, Travelers Cos. didn’t provide any forward guidance as part of its financial results. The company’s stock has now increased nearly 40% this year.
Is TRV Stock a Buy?
Travelers stock has a consensus Hold rating among 19 Wall Street analysts. That rating is based on four Buy, 11 Hold, and four Sell ratings assigned in the last three months. The average TRV price target of $226.17 implies 13.07% downside from current levels.
