Mizuho downgrades Hartford Financial stock rating on underwriting pressure

Mizuho lowered its rating on Hartford Financial Services Group stock to Neutral from Outperform, citing underwriting pressure as a key concern. The downgrade comes after 13 analysts revised their earnings estimates lower for the upcoming period. While Mizuho believes the stock is undervalued, it expects pressure on Hartford's underwriting results, including a 150 basis point increase in the loss ratio to 59.5% due to mix and pricing pressures.

The firm anticipates a slowdown in net favorable prior year development and slower net premiums written growth. Despite these challenges, Mizuho estimates operating return on equity above 15% and double-digit EPS growth in future quarters. Hartford's valuation remains attractive, trading at a P/E ratio of 9.37 and a low PEG ratio of 0.22.

The company's strong return on equity of 22% and financial health score further support this rating.