Piper Sandler has upgraded its rating on Assurant (AIZ, Financial) from Neutral to Overweight, setting a price target of $223. The firm believes that the stock's current valuation is overly influenced by market volatility related to tariffs, making it an attractive buy. Piper Sandler's analysis suggests that the company's earnings per share (EPS) are expected to remain stable.
A key factor in this positive outlook is the recent price increase in auto warranties, which has been implemented to manage rising input costs. This strategic move is anticipated to have a more significant impact in 2025 due to the long-term nature of warranty contracts. Additionally, with two-thirds of the risk handled by enterprise partners, the effect of input cost challenges on Assurant appears limited.
Furthermore, the firm notes that Assurant's Global Housing segment is poised for continued growth, with underwriting guidance considered conservative. The stock is trading at a forward EPS multiple of 10, which is below its 10-year average of 11.6, suggesting potential undervaluation.
