Hanover Insurance (THG)
NYSE:THG
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Hanover Insurance
(NYSE:THG)
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Rating:77Outperform
Price Target:
$199.00
â–²(10.64% Upside)
Action:ReiteratedDate:02/21/26
The score is driven primarily by improving financial performance (strong 2024–2025 rebound and solid cash generation) and attractive valuation (low P/E with a ~2.1% dividend yield). Earnings call guidance and sentiment were also supportive, while technical indicators are mixed and do not add strong momentum confirmation.
Positive Factors
Cash generation
Hanover’s free cash flow closely tracks reported earnings and stepped up to $1.17B in 2025, indicating durable cash conversion. Reliable FCF supports ongoing dividends, buybacks, reserve strengthening and underwriting flexibility, providing long-term capital allocation optionality.
Negative Factors
Earnings volatility
Hanover’s earnings and margins have shown sizable swings across cycles, with weak results in 2022–2023 followed by sharp rebounds. This underwriting sensitivity means profits can reverse materially in adverse loss years, complicating capital planning and making long‑term earnings less predictable.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Hanover’s free cash flow closely tracks reported earnings and stepped up to $1.17B in 2025, indicating durable cash conversion. Reliable FCF supports ongoing dividends, buybacks, reserve strengthening and underwriting flexibility, providing long-term capital allocation optionality.
Read all positive factors
Hanover Insurance (THG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.32B
Dividend Yield1.97%
Average Volume (3M)293.56K
Price to Earnings (P/E)8.2
Beta (1Y)0.34
Revenue Growth5.26%
EPS Growth72.46%
CountryUS
Employees4,900
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)5.79
Shares Outstanding35,149,315
10 Day Avg. Volume281,314
30 Day Avg. Volume293,556
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)1.83
Price to Sales (P/S)0.99
P/FCF Ratio5.59
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit3.40
Enterprise Value/Ebitda7.26
Forecast
1Y Price Target
$199.50Price Target Upside10.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)17.09
Revenue Forecast (FY)$6.70B
Hanover Insurance Business Overview & Revenue Model
Company Description
The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates through three segments: Commercial Lines, Personal Lines, and Other. The...
How the Company Makes Money
Hanover Insurance generates revenue primarily through the underwriting of insurance policies. The company collects premiums from policyholders in exchange for coverage, which constitutes its main revenue stream. Additionally, THG earns investment ...
Hanover Insurance Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and financial story: record earnings metrics, meaningful improvement in combined ratios (especially ex-CAT), robust investment income growth, book value appreciation, active capital returns, and constructive 2026 guidance. Challenges discussed were mostly tactical and manageable — competitive pressures in pockets of the portfolio, some reserve and severity adjustments (notably personal auto BI and commercial casualty), modestly elevated expense ratio due to investments and variable compensation, and ongoing CAT uncertainty. Overall, the company emphasized disciplined underwriting, portfolio management, and continued investments to support profitable growth.Positive Updates
Record Earnings and Strong ROE
Delivered record quarterly operating EPS and an all-time high annual operating return on equity (Jack: 20% full year) with an exceptional operating ROE reported at 23.1% in the fourth quarter (Jeff).
Negative Updates
Competitive Pressure in Select Markets
Management noted intensifying competition in monoline auto markets, heightened competition across certain Specialty property lines, and pockets of competition in middle market property schedules which could pressure pricing and new business margins.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Earnings and Strong ROE
Delivered record quarterly operating EPS and an all-time high annual operating return on equity (Jack: 20% full year) with an exceptional operating ROE reported at 23.1% in the fourth quarter (Jeff).
Read all positive updates
Company Guidance
For 2026 Hanover guided to consolidated net written premium growth of mid‑single digits and net investment income growth in the mid‑ to upper‑single digits versus 2025, an expected expense ratio of 30.3% (management said it will stop issuing specific expense‑ratio guidance in future years), an accident‑year combined ratio excluding catastrophes of 88%–89% (an improvement versus prior 2025 guidance), a full‑year catastrophe load of 6.5% (consistent with 2025) and a Q1 CAT load of 6.1%.Hanover Insurance Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.60B | 6.22B | 5.96B | 5.43B | 5.16B |
| Gross Profit | 2.87B | 1.24B | 652.90M | 716.30M | 1.04B |
| EBITDA | 887.00M | 573.40M | 81.50M | 191.00M | 572.20M |
| Net Income | 662.50M | 426.00M | 35.30M | 116.00M | 422.80M |
Balance Sheet | |||||
| Total Assets | 16.95B | 15.27B | 14.61B | 14.00B | 14.25B |
| Cash, Cash Equivalents and Short-Term Investments | 1.12B | 2.02B | 8.30B | 7.79B | 7.95B |
| Total Debt | 1.22B | 784.10M | 783.20M | 782.40M | 781.60M |
| Total Liabilities | 13.37B | 12.43B | 12.15B | 11.66B | 11.11B |
| Stockholders Equity | 3.57B | 2.84B | 2.47B | 2.33B | 3.14B |
Cash Flow | |||||
| Free Cash Flow | 1.17B | 796.20M | 349.80M | 704.50M | 815.70M |
| Operating Cash Flow | 1.18B | 806.40M | 361.70M | 722.30M | 823.70M |
| Investing Cash Flow | -666.20M | -541.50M | -228.50M | -507.60M | -460.20M |
| Financing Cash Flow | 175.20M | -145.50M | -122.10M | -140.60M | -253.20M |
Hanover Insurance Technical Analysis
Positive
179.87
Price Trends
173.68
Positive
176.10
Positive
173.25
Positive
Market Momentum
0.52
Negative
61.56
Neutral
86.17
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THG, the sentiment is Positive. The current price of 179.87 is above the 20-day moving average (MA) of 172.74, above the 50-day MA of 173.68, and above the 200-day MA of 173.25, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 61.56 is Neutral, neither overbought nor oversold. The STOCH value of 86.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THG.
Hanover Insurance Risk Analysis
Hanover Insurance disclosed 39 risk factors in its most recent earnings report. Hanover Insurance reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hanover Insurance Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.39B | 14.63 | 23.08% | 4.05% | 3.72% | -16.23% | |
77 Outperform | $6.32B | 8.17 | 19.99% | 1.97% | 5.26% | 72.46% | |
77 Outperform | $4.90B | 10.96 | 13.59% | 1.85% | 10.98% | 74.87% | |
74 Outperform | $5.21B | 9.63 | 25.65% | 1.34% | 6.18% | -21.28% | |
69 Neutral | $7.58B | 8.30 | 16.27% | 1.80% | 6.37% | 68.32% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
56 Neutral | $1.88B | -74.49 | 9.03% | 3.15% | 4.51% | -8.29% |
* Financial Sector Average
THG
Hanover Insurance
179.87
27.05
17.70%
AXS
Axis Capital
102.43
12.59
14.02%
MCY
Mercury General
94.10
42.76
83.30%
RLI
RLI
58.69
-14.56
-19.88%
SIGI
Selective Insurance Group
81.58
-2.78
-3.29%
KMPR
Kemper
32.01
-24.42
-43.27%
Hanover Insurance Corporate Events
Private Placements and Financing
Hanover Insurance Announces Redemption of 2026 Notes
Neutral
Dec 16, 2025
On December 16, 2025, Hanover Insurance Group announced the redemption of its outstanding 4.500% Notes due 2026, originally issued in 2016. The redemption, scheduled for January 15, 2026, involves a total principal amount of $375 million, marking ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.