Wunderlich Securities Raises Tower Group PT To $32

Tower Group TWGP reported better-than-expected operating EPS for 3Q10 of $0.77 “compared to our estimate and consensus of $0.75,” Wunderlich Securities reports. Book value increased 12.1% to $26.34 from $23.50. Top-line growth increased significantly in 3Q10, with total revenues increasing 66.3% to $422 million as a result of the acquisition of SUA and OneBeacon (OB-NR). “We believe TWGP is executing on its strategy and reporting more consistent earnings to meet investors' expectations,” Wunderlich Securities writes. “We are raising our price target to $32 (from $27), which is 1.1 times 2011E book value of $30.13. In addition, we are revising our 2010 EPS estimate to $2.57 from $2.55 to reflect the earnings beat in 3Q10. We rate TWGP shares Buy.” Tower Group currently trades at $25.37.