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SunTrust Robinson Humphrey cuts James River after Uber affiliate cancellation

SunTrust Robinson Humphrey analyst Mark Hughes downgraded James River Group Holdings Ltd. after the announcement that it will strengthen its reserves in the third quarter and cancel all insurance policies issued to Uber Technologies Inc. affiliate Rasier LLC.

Hughes lowered his rating on James River to "hold" from "buy," primarily due to the "implied uncertainty" related the adverse development of Uber reserves. He noted that the strengthening will only affect the 2016 and 2017 accident years. However, he pointed out that the magnitude of the volatility in losses as well as concern about future trajectory have pushed James River's management to end the relationship.

He cut his price target to $40 from $55 and lowered his EPS estimates to $1.15 from $2.75 for 2019 and to $1.35 from $3.00 for 2020.