Why Aren't More Analysts Recommending The Travelers Companies (TRV)?

The Travelers Companies may be undervalued with mixed growth prospects, but the 16 analysts following the company give it an rating of hold. Their target prices range from $172.0 to $230.0 per share, for an average of $196.69. At today's price of $169.03, The Travelers Companies is trading -14.06% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.

The 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. Based in New York, NY, the large-cap Finance company has 31,850 full time employees. The Travelers Companies has provided a 2.2% dividend yield over the last 12 months.

The Travelers Companies has a trailing twelve month P/E ratio of 14.4, compared to an average of 14.34 for the Finance sector. Considering its EPS guidance of $17.08, the company has a forward P/E ratio of 9.9.

The average compound growth rate of the company's historical and projected earnings per share is 11.5%. On this basis, the company's PEG ratio is 1.32, which shows that it is fairly priced.

The market is placing a reasonable value on The Travelers Companies's book value, since its P/B ratio of 1.69 is comparable to its sector average of 1.57. The company's shares are currently 4.4% below their Graham number, indicating that its shares have a margin of safety.

So why does The Travelers Companies get a bad rating from most analysts despite its seemingly attractive valuation? One reason could be its worrying EPS growth rate of 4.3%.