The Travelers Companies, Inc. TRV shares lost 3.4% in a month, underperforming the industry, the Finance sector and the Zacks S&P 500 composite index in the same time frame.

TRV, one of the leading writers of auto and homeowners’ insurance plus commercial U.S. property-casualty insurance, has a market capitalization of $54 billion. The average volume of shares traded in the last three months was 1.3 million.

TRV vs. Industry, Sector & S&P 500 in a Month

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The shares are trading at a premium to the industry. Its price-to-book value of 1.94X is higher than the industry average of 1.63X.
 

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Shares of other insurers like The Allstate Corporation ALL, Chubb Limited CB and The Progressive Corporation PGR are also trading at a multiple higher than the industry average.

TRV shares are trading below the 14-day moving average, indicating a bearish trend. The 14-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as it is the first marker of an uptrend or downtrend.

TRV Trading Below 50-Day Moving Average

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Travelers’ Favorable Return on Capital

Return on equity (ROE) for the trailing 12 months was 19.1%, comparing favorably with the industry’s 7.6%. This reflects its efficiency in utilizing shareholders’ funds.  Sustained operational excellence helped generate double-digit core ROE in nine out of the last 10 years. Travelers aims to generate mid-teens core ROE over time.
 

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Also, return on invested capital (ROIC) has been increasing over the last few quarters, with the company raising its capital investment over the same time frame. This reflects TRV’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.9%, better than the industry average of 5.8%.

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Mixed Analyst Sentiment on TRV

The Zacks Consensus Estimate for 2025 earnings has moved down 15.4% since it reported fourth-quarter 2024 earnings, while the same for 2026 has moved up 4.3% in the same time frame.

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The Zacks Consensus Estimate for 2025 earnings stands at $17.56, suggesting a decrease of 18.6% despite 7.4% higher revenues of $49.9 billion. The consensus estimate for 2026 earnings stands at $23.09, suggesting an increase of 31.5% on 6.1% higher revenues of $52.9 billion.

The long-term earnings growth rate is expected to be 11.2%, better than the industry average of 9.2%.

Factors Impacting Travelers

Travelers’ solid retention, better pricing, increased new business and positive renewal premium change poise it well for growth. The insurer’s compelling product portfolio consists of coverages across nine lines of business.

A solid auto and homeowners business, as well as commercial businesses, banking on the successful execution of growth strategies and stability in the markets where it operates, is set to drive the company’s lines of business.

Higher returns from the non-fixed income portfolio have been driving investment income over the last four years amid a low-interest rate environment. Travelers estimates fixed-income NII, including earnings from short-term securities, to be $3 billion in 2025, with $710 million in the first quarter of 2025. The metric is expected to grow to approximately $790 million in the fourth quarter. The company hopes that the $100 billion investment portfolio should continue generating a higher level of predictable and reliable net investment income.

Travelers has a conservative balance sheet among its peers. The insurer remains focused on keeping the debt-to-capital ratio between 15 and 25 and has been increasing its book value for the past 10 years. TRV had $5.04 billion remaining under repurchase authorization at 2024 end.

By its nature of operations, TRV’s results are vulnerable to catastrophe loss. The insurer estimates losses stemming from the California wildfire to have a material impact on its first-quarter 2025 earnings.

Travelers has been witnessing a rise in expenses over the past many years owing to an increase in claims and claim adjustment expenses as well as general and administrative expenses. The company expects the expense ratio to be around 28.5% in 2025.

Average Target Price for TRV Suggests a Solid Upside

Based on short-term price targets offered by 22 analysts, the Zacks average price target is $270.73 per share. The average suggests a potential 13.6% upside from Tuesday’s closing price.

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Impressive Dividend History

Travelers has been hiking dividends for the last 20 years. Its dividend yield of 1.8% appears attractive compared with the industry average of 0.3%, making it an attractive pick for yield-seeking investors.

To Conclude

Travelers has a strong market presence in auto, homeowners’ insurance and commercial U.S. property-casualty insurance with solid inorganic growth. Strong renewal rate change, retention and increase in new business supported by a compelling portfolio and solid capital position should continue to drive earnings.

The company has an impressive VGM Score of B. This style score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth and momentum.

However, a premium valuation, price underperformance, a bearish trend and a decline in 2025's bottom-line projection keep us cautious about this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

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