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Hanover Insurance
(NYSE:THG)
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Rating:76Outperform
Price Target:
$263.00
▲(20.58% Upside)
Action:Reiterated
Date:07/30/26
THG scores well primarily on improved fundamentals (recovered margins, strong ROE, and robust free cash flow with manageable leverage). Technicals are supportive with a clear uptrend versus key moving averages. Offsetting factors are a only-moderate valuation (P/E ~21) and the earnings-call risks typical for P&C insurers (expense ratio uptick, casualty reserve uncertainty, competitive pockets, and catastrophe-load expectations), though management commentary remains overall constructive.
Positive Factors
Strong Cash Generation
Consistently high operating and free cash flow that closely tracks net income gives Hanover durable internal funding for reinsurance, technology and buybacks. Reliable cash conversion improves capital flexibility and cushions underwriting volatility over multiple cycles.
Negative Factors
Earnings & Cash Volatility
Past collapse in profitability and prior free-cash-flow declines show Hanover remains exposed to underwriting cycles and catastrophe swings. Such volatility can materially alter ROE and capital deployment plans across 2–6 month to multi-year horizons, complicating forecasting.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Consistently high operating and free cash flow that closely tracks net income gives Hanover durable internal funding for reinsurance, technology and buybacks. Reliable cash conversion improves capital flexibility and cushions underwriting volatility over multiple cycles.
Read all positive factors
Hanover Insurance (THG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.10B
Dividend Yield1.61%
Average Volume (3M)331.15K
Price to Earnings (P/E)11.0
Beta (1Y)0.36
Revenue Growth5.57%
EPS Growth38.39%
CountryUS
Employees4,900
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)21.23
Shares Outstanding34,820,220
10 Day Avg. Volume321,284
30 Day Avg. Volume331,150
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$217.00Price Target Upside-0.51% Downside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)19.51
Revenue Forecast (FY)$6.64B
Hanover Insurance Business Overview & Revenue Model
Company Description
The Hanover Insurance Group, Inc. (THG) is a U.S.-based insurer offering a wide array of property and casualty coverage through its various operating units. Its operations are organized into three main divisions: Commercial Lines, Personal Lines, ...
How the Company Makes Money
Hanover makes money primarily by underwriting insurance policies and investing the premiums it collects. (1) Underwriting income: The company earns premiums from policyholders across its commercial lines, personal lines, and specialty offerings. P...
Hanover Insurance Earnings Call Summary
Earnings Call Date:Jul 28, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed predominantly positive momentum: record second-quarter performance driven by disciplined underwriting, portfolio diversification, strong pricing in Personal and Core Commercial, Specialty strength, successful reinsurance renewals and rising investment income. Headwinds are manageable and primarily relate to a modestly higher expense ratio, variability in partnership income, prudent increases in casualty liability picks, and some competitive/market softness in property-exposed niches. Management emphasized capital returns (share buybacks) and continued investment in technology and distribution, positioning the company to sustain profitable growth.Positive Updates
Record Quarterly Financial Performance
Operating return on equity ~20%; operating earnings of $5.31 per diluted share; GAAP combined ratio 91.2% (improved 1.3 pts YoY) and ex-CAT combined ratio 85.5%; net written premium growth of about 4.4%–4.6% year-over-year; book value per share up 3.5% sequentially to $105.40 (3.8% ex-unrealized).
Negative Updates
Third-Quarter Catastrophe Load and Guidance Conservatism
Company expects a Q3 catastrophe load of 6.9% and stated a preference not to update guidance intra-year despite running better-than-expected year-to-date, which may limit near-term guidance clarity.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Financial Performance
Operating return on equity ~20%; operating earnings of $5.31 per diluted share; GAAP combined ratio 91.2% (improved 1.3 pts YoY) and ex-CAT combined ratio 85.5%; net written premium growth of about 4.4%–4.6% year-over-year; book value per share up 3.5% sequentially to $105.40 (3.8% ex-unrealized).
Read all positive updates
Company Guidance
Management said it will not update guidance intra‑year but noted results are running “a couple of points” better than the original combined‑ratio trajectory; third‑quarter catastrophe load is expected to be 6.9% and management does not expect to give back the outperformance. Key metrics underpinning that outlook included Q2 operating ROE of ~20% and operating EPS of $5.31, a reported combined ratio of 91.2% (85.5% ex‑CAT) with a current accident‑year loss ratio ex‑CAT of 55.8%, net written premium growth of roughly 4.4–4.6% (Personal +2.6%, Core Commercial +7.2%, Specialty +4.4%, Middle Market +9.4%, Small Commercial +6%), favorable ex‑CAT prior‑year development of $21.5 million, reinsurance enhancements (CAT occurrence program exhaust $2.05B with $200M retention, new CAT bond upsized to $150M, per‑risk limit +$25M), a fixed‑maturity earned yield of 4.45% (up from 4.24%) and a $700 million share‑repurchase authorization (Q2 buybacks ~291,000 shares / $55M; YTD ~827,000 at $180 avg), plus the expectation of sequential PIF growth by end‑2026.Hanover Insurance Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.76B | 6.60B | 6.22B | 5.96B | 5.43B | 5.16B |
| Gross Profit | 2.70B | 2.87B | 1.24B | 652.90M | 716.30M | 1.04B |
| EBITDA | 999.20M | 882.40M | 573.40M | 81.50M | 191.00M | 572.20M |
| Net Income | 755.60M | 662.50M | 426.00M | 35.30M | 116.00M | 422.80M |
Balance Sheet | ||||||
| Total Assets | 14.79B | 16.95B | 15.27B | 14.61B | 14.00B | 14.25B |
| Cash, Cash Equivalents and Short-Term Investments | 2.02B | 3.00B | 2.02B | 8.30B | 7.79B | 7.95B |
| Total Debt | 844.00M | 1.22B | 784.10M | 783.20M | 782.40M | 781.60M |
| Total Liabilities | 13.19B | 13.37B | 12.43B | 12.15B | 11.66B | 11.11B |
| Stockholders Equity | 3.67B | 3.57B | 2.84B | 2.47B | 2.33B | 3.14B |
Cash Flow | ||||||
| Free Cash Flow | 1.25B | 1.17B | 796.20M | 349.80M | 704.50M | 815.70M |
| Operating Cash Flow | 1.26B | 1.18B | 806.40M | 361.70M | 722.30M | 823.70M |
| Investing Cash Flow | -930.10M | -666.20M | -541.50M | -228.50M | -507.60M | -460.20M |
| Financing Cash Flow | -309.70M | 175.20M | -145.50M | -122.10M | -140.60M | -253.20M |
Hanover Insurance Technical Analysis
Positive
218.11
Price Trends
205.94
Positive
192.21
Positive
183.66
Positive
Market Momentum
3.41
Positive
61.76
Neutral
81.25
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 218.11 is above the 20-day moving average (MA) of 217.53, above the 50-day MA of 205.94, and above the 200-day MA of 183.66, indicating a bullish trend. The MACD of 3.41 indicates Positive momentum. The RSI at 61.76 is Neutral, neither overbought nor oversold. The STOCH value of 81.25 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.62B | 12.87 | 24.37% | 4.08% | 10.29% | 35.39% | |
78 Outperform | $5.65B | 11.73 | 13.87% | 1.80% | 7.30% | 32.16% | |
77 Outperform | $7.68B | 6.59 | 19.21% | 1.51% | 9.43% | 35.23% | |
77 Outperform | $5.93B | 7.06 | 36.48% | 1.18% | 9.70% | 193.37% | |
76 Outperform | $8.10B | 10.96 | 21.22% | 1.72% | 5.57% | 38.39% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
57 Neutral | $1.67B | 45.69 | 1.52% | 4.44% | 0.51% | -88.36% |
* Financial Sector Average
THG
Hanover Insurance
232.63
64.71
38.53%
AXS
Axis Capital
105.32
12.83
13.87%
MCY
Mercury General
107.12
36.45
51.58%
RLI
RLI
61.24
-0.27
-0.43%
SIGI
Selective Insurance Group
94.79
17.28
22.30%
KMPR
Kemper
28.38
-30.42
-51.73%
Hanover Insurance Corporate Events
Executive/Board ChangesStock BuybackShareholder Meetings
Hanover Insurance Names New Principal Accounting Officer, Expands Buyback
Positive
May 13, 2026
On May 13, 2026, The Hanover Insurance Group appointed longtime executive Patricia A. Norton-Gatto, currently senior vice president and corporate controller, as principal accounting officer, succeeding CFO Jeffrey M. Farber in that role. Norton-Ga...
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.