Downgrade to Mkt; Taking Profits, Still Operating on All Cylinders

研报英文原文证据摘录

Downgrade to Mkt; Taking Profits, Still Operating on All Cylinders

nd its larger-than-peer-avg (= to ~40% of revs) personal auto/home portfolio. This (FY-Dec.) 2025A 2026E 2027E

portfolio had experienced consecutive catastrophe seasons which we estimated were EPS $19.11 $18.48↑ $18.76↑

unusual in nature, especially because we est'd THG could successfully push through

BVPS $100.90 $107.65↓ $115.90↓

policy terms & condition changes (i.e. higher deductibles + de-concentrate in certain

areas of Michigan). BVPS x AOCI $95 $104↓ $115↓

Fast-forward to today and shares have reverted to ~1.8x book value (15% above Consensus Estimates

historical levels) as Hanover has successfully executed its profit turnaround goals 2025A 2026E 2027E

within personal insurance, while at the same time (not an easy task by any measure), EPS $18.19 $18.39

being one of the minority of insurers maintaining strong profits by avoiding lawsuit/ Valuation

social inflation potholes in its commercial-insurance portfolio. 2025A 2026E 2027E

We continue to see one remaining material positive catalyst, which is a return to P/E 10.3x 10.7x 10.5x

"normal"/higher buyback levels, which should boost forward EPS estimates by 1-3%

P/BVPS 2.0x 1.8x 1.7x

(especially in 2027 because the Street appears meaningfully too low). We estimate

a good percentage of investors already appreciate this point, while certain sell-side QTR. EPS Q1 Q2 Q3 Q4

estimates fail to perform the math in their models. This buyback math was made even 2025A $3.87 $4.35 $5.10 $5.79

easier for the sell-side to appreciate as THG issued an 8-K last week terminating its 2026E $5.25a $3.98 $4.21 $5.04

current share repurchase program with $63M and authorizing a larger $700M program 2027E $5.09 $4.15 $4.33 $5.19

(with no expiration date).