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Sell Travelers as inflationary pressures threaten the insurance company’s margins, Goldman says

Insurance giant Travelers Companies’ margins could be under pressure as inflation stays elevated, according to Goldman Sachs. Analyst Alex Scott downgraded Travelers Companies to sell from neutral following a recent analysis into life, and property and casualty insurance companies amid rising inflation. “We are downgrading TRV to a Sell from Neutral driven mainly by our scenario analysis in the report that suggests to us that TRV has less upside to further margin improvement and that we could actually begin to see margins deteriorate as the property and physical damage severity trends have an impact,” Scott wrote. Goldman Sachs also trimmed its price target on the stock to $170 from $190 and reduced earnings per share estimates through 2024. Shares of Travelers have jumped 13.8% this year, but the new price target represents a 4.5% downside from Thursday’s close price. “We may become more positive on TRV in the event the company is able to capture excess momentum of pricing in excess of loss cost, resulting in improved underwriting results and margins greater than those identified in our pricing/loss cost analysis,” Scott wrote. Goldman also upgraded Voya Financial to buy from neutral. — CNBC’s Michael Bloom contributed reporting

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