Assured Guaranty stock (NYSE:AGO) rose 3.78% after brokerage firm KBW upgraded it to Outperform from Market perform, citing that the company’s valuation at 0.70x year-end book looks very compelling.
The stock was trading at $79.60 in the morning on Tuesday. AGO had risen 41.16% in the last 12 months.
The firm also increased its price target by $5 to $92 with the upgrade in rating.
Previously, AGO had announced the merger of its two primary U.S. insurance subsidiaries, along with a $300M special dividend to the holdco, said the research firm.
KBW said that with the unexpected announcement, and recognizing that the stock is flat with where it was immediately prior to the favorable appeals court ruling on PREPA in June, the 0.70x valuation looked promising.
The brokerage also added that its projected book value per share has a solid potential upside from the company raising expected recoveries on PREPA due to the recent court ruling, accompanied by the announced capital release to accelerate accretive share repurchases.
Looking at Seeking Alpha’s Quant Ratings, the company has a Buy rating, concurring with SA analysts. Turning to the Wall Street Community, the company has a Hold rating.