BMO Capital downgraded Selective Insurance (SIGI) to Market Perform from Outperform with a price target of $81, down from $88. The firm says the company’s future commercial auto reserve “potholes” are much higher than in the past. This will lead the stock to remain in the “penalty box” from a valuation perspective, the analyst tells investors in a research note. BMO reduced estimates for Selective post the Q3 report citing deterioration in the company’s underlying loss ratio assumption and continued reserve additions in its commercial auto segment.
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