Raymond James analyst C. Gregory Peters upgraded Mercury General (MCY) to Strong Buy from Outperform with a price target of $80, up from $70. While there is still uncertainty around the potential total loss related to the wildfires, Mercury has a potential subrogation counterclaim as a partial offset to the losses associated with the Eaton Fire, the analyst tells investors in a research note. The firm also also expects the company to benefit from a potential change in the pricing environment for the California homeowners insurance market over the next 18 months. It also thinks Mercury General’s Q4 results reflect some of the strongest underlying results in over the last 10 years, which the firm believes should continue as long as auto frequency loss trends remain relatively stable.
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