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The Travelers Companies Inc (TRV)
NYSE:TRV
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Travelers Companies
(NYSE:TRV)
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Rating:81Outperform
Price Target:
$306.00
▲(9.59% Upside)
Travelers Companies is well-positioned with strong financial performance, strategic corporate actions, and a stable technical outlook. The company's robust earnings call highlights significant improvements and strategic initiatives, while the valuation remains attractive. These factors contribute to a favorable overall stock score.
Positive Factors
Revenue Growth
Consistent growth in net written premiums across all segments indicates strong demand and effective market penetration, supporting long-term revenue expansion.
Strong Financial Health
A robust balance sheet and consistent profitability margins provide financial stability, enabling strategic investments and resilience against market fluctuations.
Capital Return to Shareholders
Significant capital return through share repurchases and dividends reflects strong cash flow and management's commitment to enhancing shareholder value.
Negative Factors
Challenges in National Property
Pricing pressures in the national property segment could impact profitability and market share, requiring strategic adjustments to maintain competitiveness.
Impact of Tort Inflation
Ongoing tort inflation poses a risk to profitability by increasing claims costs, necessitating careful pricing strategies to mitigate impact on margins.
Retention Challenges in Auto
Lower retention rates in personal auto insurance indicate competitive pressures, potentially affecting long-term customer base and revenue stability.
Travelers Companies (TRV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$62.25B
Dividend Yield1.54%
Average Volume (3M)1.11M
Price to Earnings (P/E)12.2
Beta (1Y)0.47
Revenue Growth8.54%
EPS Growth43.51%
CountryUS
Employees34,000
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)6.51
Shares Outstanding225,133,830
10 Day Avg. Volume1,179,012
30 Day Avg. Volume1,111,307
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)1.97
Price to Sales (P/S)1.18
P/FCF Ratio6.05
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue1.45
Enterprise Value/Gross Profit5.40
Enterprise Value/Ebitda9.15
Forecast
1Y Price Target
$295.00Price Target Upside5.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
Travelers Companies Business Overview & Revenue Model
Company DescriptionThe Travelers Companies, Inc., through its subsidiaries, provides a range of commercial and personal property, and casualty insurance products and services to businesses, government units, associations, and individuals in the United states and internationally. The company operates through three segments: Business Insurance, Bond & Specialty Insurance, and Personal Insurance. The Business Insurance segment offers workers' compensation, commercial automobile and property, general liability, commercial multi-peril, employers' liability, public and product liability, professional indemnity, marine, aviation, onshore and offshore energy, construction, terrorism, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve mid-sized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial trucking industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents, and program managers. The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty coverages and related risk management services through independent agencies and brokers. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals through independent agencies and brokers. The Travelers Companies, Inc. was founded in 1853 and is based in New York, New York.
How the Company Makes MoneyTravelers Companies generates revenue primarily through the collection of premiums from its insurance policies. The company earns income by underwriting insurance policies, which involves assessing risk and determining the premiums charged to policyholders. Key revenue streams include commercial insurance premiums from businesses, personal insurance premiums from individuals, and investment income from managing its insurance reserves. Significant partnerships with agents and brokers enhance distribution and market reach, while a disciplined approach to underwriting and risk management helps maintain profitability. Additionally, Travelers invests in financial markets, which contributes to its earnings through investment income.
Travelers Companies Earnings Call Summary
Earnings Call Date:Jul 17, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance with significant improvements in underwriting results, profitability, and investment income. While there are challenges in certain segments such as national property and personal auto retention, the strategic sale of the Canadian business and effective capital management highlight a positive outlook.Q2-2025 Updates
Positive Updates
Exceptional Second Quarter Results
Core income reached $1.5 billion or $6.51 per diluted share, with a core return on equity of 18.8% for the quarter and 17.1% over the trailing twelve months. Underwriting income was supported by a 35% increase in underlying underwriting income and net earned premiums up by 7% to $10.9 billion.
Improved Combined Ratios Across Segments
The reported combined ratio improved by almost 10 points to 90.3%, with notable improvements in Business Insurance (88.3%), Bond and Specialty Insurance (87.8%), and Personal Insurance (79.3%).
Strong Investment Performance
The investment portfolio generated $774 million in after-tax net investment income, with total invested assets surpassing $100 billion.
Capital Return to Shareholders
The company returned more than $800 million to shareholders, including $557 million in share repurchases. Adjusted book value per share increased by more than 14% over the past year.
Growth in Net Written Premiums
Net written premiums grew to $11.5 billion, with increases in all segments: Business Insurance (5%), Bond and Specialty Insurance (4%), and Personal Insurance (3%).
Negative Updates
Challenges in National Property
The national property business experienced pricing pressure, leading to some accounts being ceded to the subscription market.
Impact of Tort Inflation
Tort inflation continues to be a concern, impacting loss ratios, but the company is pricing appropriately for it.
Retention Challenges in Auto
Retention in personal auto remains below historical levels, at 82% compared to the typical 84%, reflecting ongoing competitive pressures.
Canadian Business Sale
The sale of most of the Canadian business, while strategic, indicates challenges in maintaining scale and navigating a difficult regulatory environment.
Company Guidance
During the second quarter results call for The Travelers Companies, Inc., the guidance provided highlighted a strong financial performance with several key metrics. The company reported a core income of $1.5 billion, or $6.51 per diluted share, with a core return on equity of 18.8% for the quarter and 17.1% for the trailing twelve months. The reported combined ratio improved by nearly 10 points to 90.3%, driven by lower catastrophe losses and higher underlying underwriting results. The underwriting income was bolstered by a 7% increase in net earned premiums to $10.9 billion, and the underlying combined ratio improved by three points to 84.7%. Each segment showed robust results, with Business Insurance's underlying combined ratio improving to 88.3%, Bond and Specialty Insurance at 87.8%, and Personal Insurance at 79.3%. Additionally, the investment portfolio performed well, generating $774 million in after-tax net investment income. The company returned over $800 million to shareholders, including $557 million in share repurchases, and saw an adjusted book value per share increase by more than 14% year-over-year. Net written premiums grew to $11.5 billion, with notable growth in Business Insurance (5%), Bond and Specialty Insurance (4%), and Personal Insurance (3%). The call also discussed plans to sell most of its Canadian business to Definity, expecting it to be accretive to earnings per share in the coming years.Travelers Companies Financial Statement Overview
Summary
Travelers Companies exhibits strong financial health with consistent revenue growth, solid profitability margins, and a robust balance sheet. Efficient cash management is evident, supporting strategic flexibility. The low debt levels reduce financial risk, while high equity returns indicate efficient asset utilization. Overall, the company is well-positioned for continued stability and growth in the competitive insurance sector.Income Statement
The income statement shows strong revenue growth with a TTM increase of 11.4% from the previous year. The Gross Profit Margin remains consistent at 100%, indicative of the company's solid revenue base. The Net Profit Margin improved to 11%, reflecting better operational efficiency. The EBIT and EBITDA margins also demonstrate steady financial health with EBIT at 10.3% and EBITDA at 15.3% in TTM, ensuring robust profitability.85
Very Positive
Balance Sheet
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.27, suggesting prudent leverage levels. The Return on Equity (ROE) increased to 17.8% in TTM, highlighting efficient equity usage. The Equity Ratio stands at 21.3%, reflecting a strong equity base, albeit slightly lower than ideal for full stability against liabilities.78
Positive
Cash Flow
Cash flow analysis reveals strong cash generation capabilities with a 6.2% growth in free cash flow in TTM. The Operating Cash Flow to Net Income ratio of 1.84 indicates excellent cash conversion efficiency, and the Free Cash Flow to Net Income ratio of 1.84 underscores the robust liquidity position despite heavy investing activities.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 47.84B | 46.43B | 41.37B | 36.90B | 34.82B | 31.98B |
| Gross Profit | 12.84B | 12.40B | 8.93B | 8.53B | 9.47B | 8.09B |
| EBITDA | 7.59B | 7.29B | 4.47B | 4.53B | 5.67B | 4.37B |
| Net Income | 5.25B | 5.00B | 2.99B | 2.84B | 3.66B | 2.70B |
Balance Sheet | ||||||
| Total Assets | 138.87B | 133.19B | 125.98B | 115.72B | 120.47B | 116.76B |
| Cash, Cash Equivalents and Short-Term Investments | 92.84B | 89.13B | 83.59B | 75.43B | 82.41B | 80.23B |
| Total Debt | 8.03B | 8.03B | 8.03B | 7.29B | 7.29B | 6.55B |
| Total Liabilities | 109.36B | 105.33B | 101.06B | 94.16B | 91.58B | 87.56B |
| Stockholders Equity | 29.52B | 27.86B | 24.92B | 21.56B | 28.89B | 29.20B |
Cash Flow | ||||||
| Free Cash Flow | 9.63B | 9.07B | 7.71B | 6.46B | 7.27B | 6.52B |
| Operating Cash Flow | 9.63B | 9.07B | 7.71B | 6.46B | 7.27B | 6.52B |
| Investing Cash Flow | -7.61B | -7.26B | -6.82B | -3.73B | -5.20B | -4.89B |
| Financing Cash Flow | -2.11B | -1.75B | -1.05B | -2.67B | -2.04B | -1.42B |
Travelers Companies Technical Analysis
Positive
279.22
Price Trends
269.63
Positive
267.03
Positive
257.22
Positive
Market Momentum
2.06
Positive
58.94
Neutral
78.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRV, the sentiment is Positive. The current price of 279.22 is above the 20-day moving average (MA) of 275.96, above the 50-day MA of 269.63, and above the 200-day MA of 257.22, indicating a bullish trend. The MACD of 2.06 indicates Positive momentum. The RSI at 58.94 is Neutral, neither overbought nor oversold. The STOCH value of 78.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRV.
Travelers Companies Risk Analysis
Travelers Companies disclosed 23 risk factors in its most recent earnings report. Travelers Companies 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
Travelers Companies Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $62.25B | 12.23 | 19.29% | 1.54% | 8.54% | 43.51% | |
80 Outperform | $111.46B | 12.33 | 13.25% | 1.33% | 6.74% | -4.05% | |
77 Outperform | $28.83B | 17.30 | 18.94% | 1.75% | 11.41% | 15.32% | |
77 Outperform | $55.67B | 9.94 | 24.24% | 1.83% | 9.81% | 94.71% | |
73 Outperform | $24.05B | 11.46 | 16.24% | ― | 1.66% | 8.51% | |
64 Neutral | $1.23B | 25.33 | 3.82% | ― | -2.05% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
TRV
Travelers Companies
279.22
47.98
20.75%
CB
Chubb
282.25
-5.24
-1.82%
ALL
Allstate
214.65
28.04
15.03%
MKL
Markel
1,911.36
348.99
22.34%
PRA
ProAssurance
23.99
8.98
59.83%
WRB
W. R. Berkley Corporation
76.62
20.14
35.66%
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.