Travelers may be undervalued with poor growth indicators, but the 20 analysts following the company give it an rating of hold. Their target prices range from $202.0 to $252.0 per share, for an average of $229.76. At today's price of $212.95, Travelers is trading -7.32% 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 32,967 full time employees. Travelers has provided a 1.9% dividend yield over the last 12 months.
Travelers has a trailing twelve month P/E ratio of 15.8, compared to an average of 15.89 for the Finance sector. Considering its EPS guidance of $20.94, the company has a forward P/E ratio of 10.2.
Travelers is overpriced compared to its book value, since its P/B ratio of 1.95 is higher than the sector average of 1.76. The company's shares are currently 21.2% below their Graham number, indicating that its shares have a margin of safety.
If analysts are giving the stock a bad rating, it's likely that they are looking beyond simple valaution metrics and attempting to forecast the company's growth potential. For example, Travelers has narrow margins as you can see in the financial summary below.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $7,796 | $8,063 | $31,981 | $34,816 | $36,884 | $41,364 |
| Interest Income (M) | $352 | $344 | $339 | $340 | $351 | $376 |
| Operating Margins | 38% | 39% | 10% | 13% | 9% | 8% |
| Net Margins | 8% | 11% | 8% | 11% | 8% | 7% |
| Net Income (M) | $621 | $873 | $2,697 | $3,662 | $2,842 | $2,991 |
| Depreciation & Amort. (M) | $803 | $763 | $789 | $870 | $826 | $722 |
| Diluted Shares (M) | 270 | 262 | 255 | 251 | 240 | 232 |
| Earnings Per Share | $9.28 | $9.92 | $10.52 | $14.49 | $11.77 | $12.79 |
| EPS Growth | n/a | 6.9% | 6.05% | 37.74% | -18.77% | 8.67% |
| Avg. Price | $116.49 | $126.76 | $110.26 | $146.69 | $167.74 | $212.95 |
| P/E Ratio | 12.43 | 12.66 | 10.44 | 10.03 | 14.08 | 16.47 |
| Free Cash Flow (M) | $4,380 | $5,205 | $6,519 | $7,274 | $6,465 | $7,711 |
| EV / EBITDA | 8.46 | 8.59 | 6.83 | 6.82 | 9.52 | 11.94 |
| Total Debt (M) | $600 | $600 | $100 | $100 | $100 | $100 |
| Net Debt / EBITDA | 0.06 | 0.03 | -0.15 | -0.12 | -0.17 | -0.13 |
| Current Ratio | 0.62 | 0.82 | 7.21 | 7.61 | 7.99 | 6.5 |
