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KBW cautious on Bermuda reinsurance but upgrades Everest Re

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KBW cautious on Bermuda reinsurance but upgrades Everest Re

Keefe Bruyette & Woods analyst Meyer Shields on Nov. 26 upgraded Everest Re Group Ltd.'s stock rating to "market perform" from "underperform," largely on valuation.

The analyst is "cautious" on Bermuda's reinsurance sector, projecting "disappointing" renewal rate changes come Jan. 1, 2018, and possible tax reform headwinds. Everest, however, is not expected to underperform peers. Shields calculates that the company's stock trades at approximately 112% of its third-quarter book value per share, compared with the 110% peer group median and "well above" its historical average levels. Shields adds that the underperformance corresponds with "some now-dispelled complacency following the 11-year hurricane drought."

Shields kept the price target at $216. The stock closed at $217.67 on Nov. 24.