Hanover Insurance's Trajectory Supports ROE Outlook but Slowing Macro to Limit 2026 Earnings Growth, RBC Says

MT Newswires Live11-26

Hanover Insurance Group's (THG) strength in core units and operations supports a strong return-on-equity outlook but faces limited earnings growth in 2026 amid a slowing macroeconomic landscape, RBC Capital Markets said in a Monday research note.

A part of the limitation is due to the favorable catastrophe loss activity year-to-date. Forecasts for a slump in net interest income growth and flat underwriting margins are likely to impact share performance in the near term, according to the note.

The company's Personal Lines re-underwriting effort appears to be nearly complete, and it is moving towards a growth mindset across its businesses. Topline potential is limited to the mid-single-digits next year due to rising competition in middle-market commercial and personal lines, the brokerage stated.

"Pricing remains in excess of loss trend, but we expect capital generation to remain above organic opportunities and drive ROE degradation in 2026," analysts wrote.

The brokerage initiated coverage of the stock with a sector perform rating and a price target of $200 per share.

Price: 186.28, Change: +2.06, Percent Change: +1.12

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