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Remaining Bullish on PartnerRe
The following excerpts explain why Zacks service sector analyst Neena Mishra remains bullish on PartnerRe Ltd. (PRE - Analyst Report), the insurance company and rates it a Buy:
"PRE's 3Q07 operating earnings of $4.78 per share were way ahead of our estimates and consensus. The positive surprise resulted from strong growth in premiums earned from its worldwide specialty business and property and casualty business, coupled with low level of incurred losses. Based on excellent results, we are increasing our FY07 and FY08 estimates. We expect PRE to continue to deliver strong results for the coming quarters based on a benign loss environment despite some softening in the non-life reinsurance pricing.
"At the current price, the shares of PRE trade at 1.21x its 3Q07 book value of $65.07 per share, close to the middle of its 10-year range, (which bottomed in 1999 at 0.89x and peaked in 2001 at 1.73x) and at a 4% discount to the peer group median. Our six-month price target of $90 per share reflects a slightly expanded multiple of approximately 1.28x to our estimated March 2008 book value of $70.05 per share. Combined with the annual dividend of $1.72 per share, it implies a return of about 15.8% over the period.
"We are thus maintaining our Buy recommendation on the shares. The quantitative Zacks Rank for PRE is currently 2, up from 3 as on August 2, indicating slight upward pressure on the shares over the near term. Short interest is currently 15.94 days, versus 10.6 days previously."
Read the full analyst note on PRE.
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| Market Summary | Feb 09, 2010 23:05 pm ET |
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