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NEW YORK -- Chubb Corp. shares hit an all-time high Friday after a Deutsche Bank analyst upgraded the company to "Buy" from "Hold," saying that the company offers the best value for investors among the traditional property and casualty companies.
THE SPARK: Joshua Shanker, who boosted his price target by $20 to $90, said Warren, N.J.-based Chubb's shares have "significantly lagged" those of some of its peers following Superstorm Sandy and the temporary suspension of its stock buyback program.
THE BIG PICTURE: The Warren, N.J.-based property and casualty insurer said Thursday that its fourth-quarter net income dropped 77 percent as it suffered heavy costs related to Superstorm Sandy.
The company also announced a plan to repurchase as much as $1.3 billion of its common stock. Chubb bought back 369,900 shares at a total cost of $28 million, or an average cost of $76.54 a share, during the fourth quarter.
Net income was $102 million, or 38 cents a share, down from $452 million, or $1.60 a share, in the fourth quarter of 2011.
Pre-tax costs related to Sandy totaled $882 million. The Oct. 29 storm was one of the worst ever to strike the Northeast and is blamed for more than 130 deaths and tens of billions of dollars in property damage. Chubb, along with Allstate Corp. and Travelers Cos., had a major share of the coverage in areas with heavy damage from the storm.
Excluding after-tax investment gains and losses, Chubb's operating income was $44 million, or 16 cents a share. The company also said it expects 2013 operating income of $6.40 to $6.80 a share, with net written premiums up 2 to 4 percent.
THE ANALYSIS: Shanker pointed to Chubb's stock buyback plans for the year and optimistic guidance.
"Given the company's geographic blueprint, it is among the best poised to experience post-Sandy rate improvement," Shanker said.
THE SHARES: Up $2.37, or 3 percent, to $82.68 in afternoon trading, after peaking at $85 earlier in the session, passing their previous 52-week high of $81.80 and marking their highest price ever.