KBW Upgrades Chubb, Price Target Skyrockets To $141

In a report published Monday, Keefe, Bruyette & Woods analyst Meyer Shields upgraded the rating on Chubb Corp. CB from Market Perform to Outperform, while raising the price target from $92 to $141. The analyst believes that another bid for the company is unlikely. "[T]here are very few insurance companies big enough to even consider an offer, and Berkshire Hathaway, Inc. BRK (which could, of course) is already organically building its own specialty insurer, and it typically avoids auctions," Shields stated. Although the 26.1 percent increase in Chubb's stock on last Wednesday reflects the current share price of ACE Limited ACE, adjusted for the takeover metrics, the analyst believes that Chubb's stick is significantly undervalued, and "along with buying ACE itself, we see buying Chubb as an indirect way of capturing that expected upside," Shields added.