Piper Jaffray Comments On CB Shares

Piper Jaffray, which downgraded shares of Chubb Corporation CB to Neutral from Overweight, said that it believes exposure to US winter storms and the cyclone Yasi create a dimension of uncertainty in the short-run. “At the same time, we view the company's over-capitalization and inability to put capital to work (beyond share repurchase), as headwinds in the effort to outperform,” Piper Jaffray writes. “While a healthy dose of share repurchase likely buoys the shares, we believe the broader economy and property-casualty market provide a cap on any multiple expansion occurring further out. “As a result, we revised our target multiple lower from 1.2x to 1.0x forward book value, yielding a price target of $62. For investors taking profits and/or looking to invest in the large cap property-casualty space, we recommend and reiterate our Overweight rating on shares of ACE Ltd.” Chubb Corporation closed Monday at $58.86.