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KBW sees Reinsurance Group of America's current valuation as good entry point

Keefe Bruyette & Woods analyst Ryan Krueger upgraded Reinsurance Group of America Inc. to "outperform" from "market perform" after the 12% year-to-date pullback in the stock.

Krueger wrote that current valuation is a good entry point for investors as the stock trades at 1.15x book value excluding accumulated other comprehensive income versus an 11% return on equity and 10x 2019 EPS estimate.

He said Reinsurance Group of America generated "very consistent" results over the past few years, with five-, 10- and 15-year book value plus dividend growth of 11% yearly, operating return on equities of 11% to 12% and net income equaling operating income.

Krueger projects solid organic growth for the company, expecting operating revenues to grow about 6% to 7% over the intermediate term.

He maintained his target price of $165. His EPS estimates remained at $11.35 for 2018, $13.40 for 2019 and $14.55 for 2020.