ACE’s Business Mix Has Evolved; Stock Hasn’t

Analysts at Citigroup reiterate their "buy" rating on ACE Ltd ACE. The target price for ACE is set to $64. According to Citigroup, “Management has put together a mix of Specialty P/C and A&H that accounts for over half of total premiums with ROEs that should exceed management’s 15% objective. Despite this, stock continues to trade like a pure commodity reinsurer.” “We detail 4 keys in the value disconnect: 1) the company has evolved over the last decade, but the multiple has not; 2) stripping out A&H,; 3) ROEs are better than peers despite less operating and investment leverage; and 4) ACE has the most dry powder at ~24% of its market cap…. CEO Evan Greenberg maintained his stance on no share buybacks near-term indicating ACE would be a good steward of capital and that capital decisions would be looked at with a 2-3 year time horizon in mind,” the analysts say. More Analyst Ratings here