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Hartford Financial Services
(HIG - Free Report) is scheduled to release its 4Q08 financial results on Feb 5, 2009, with a conference call scheduled the next morning.

Though the share price had dropped significantly following the 3Q08 results, primarily on capital concerns, it recovered some losses after Management's updated guidance on the FY 08 earnings, capital and liquidity position.

Management now expects its capital margin to be around $2 billion at the end of FY08. Ahead of the 4Q08 earnings release, we are increasing our FY08 and FY09 EPS estimates. However, we are maintaining our Sell recommendation on the shares based on our concerns for additional losses in the investment portfolio and the Variable Annuity business, which will remain under pressure in the coming quarters.

At the current price level, shares of HIG trade at 0.33x its Sep 30, 2008 reported book value of $41.80 per share and 0.25x its adjusted book value (excluding AOCI) of $55.63 per share. Our six-month price target of $12.50 per share incorporates values for both the P&C and Life segments at 0.27x our estimated book value of $46.30 per share (excluding AOCI) as of Jun 30, 2009. This price target also equates to 2.7x our estimated earnings for FY08.

Kalyan Nandy contributed to the report.

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