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Research Alert: CFRA Reiterates Buy Recommendation On Shares Of Alleghany Corporation

05/07/2021 11:01

02:55 PM EDT, 05/07/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month target price by $90, to $840, or 19.6x our 2021 operating EPS estimate of $42.88 (trimmed by $1.42) and 13.6x our 2022 operating EPS estimate of $61.90 (increased by $9.80), versus Y's 10 year average forward multiple of 20.2x and a peer average of 15.4x. Q1 operating EPS of $9.81 versus $4.99 lagged our $11.23 operating EPS estimate but topped the $4.65 consensus forecast on 27% higher operating revenues driven by 11% higher premiums, a 37% rise in investment income, and 66% higher revenues from Alleghany Capital. Though Q1 growth is not likely a run rate, Q1 written premium growth of 14% tops most peers and positions Y for double digit premium growth in 2022. We raise our 2021 revenue growth forecast to a rise of over 15% (from an 8% to 12% rise ) and see growth of 12% to 15% in 2022. Y's ability to produce above-peer premium growth and accelerate that growth with contributions from non-insurance activities will help support the shares' premium valuation to peers, in our view.