WR Berkley's Stock Has Reached Historic Trough, BofA Says

Shares of WR Berkley Corp WRB are trading close to the troughs last seen in 2013-2014, according to BofA Securities.

The WR Berkley Analyst: Joshua Shanker upgraded WR Berkley from Underperform to Neutral and raised the price target from $80 to $86.

The WR Berkley Takeaways: Although there are concerns around the company’s ability to generate longer-term earnings growth, there seems to be limited downside to the share price, Shanker said in the upgrade note.

“Berkley has reported material renewal pricing increases averaging 10% over each of the past 8 quarters which could lead to improved loss ratios depending on how loss cost trends develop. Additionally, beginning in 2Q21, Berkley appears to be increasing its exposures and higher underwriting volumes could serve to lower the expense ratio, improving margins,” the analyst wrote.

“We are increasing our EPS forecast based on lower expense ratios, but we expect some of those benefits to reverse when T&E spending resumes post-pandemic,” he added.

WRB Price Action: Shares of WR Berkley had risen by 1.67% to $75.32 at the time of publication Thursday.