Analyst James Naklocki expects Travelers (NYSE:TRV) to "drag its feet" on factoring in lower tax rates into pricing, thus allowing margins/returns to stay high vs. peers.
Commercial line insurance brokers like TRV and Chubb (NYSE:CB) would seem to benefit most from a big infrastructure bill promised by the incoming president.
He upgrades to Buy from Neutral with a Street-high $130 price target (about 15% upside).
Alongside, he downgrades Arthur J. Gallagher (NYSE:AJG) to Neutral from Buy, saying mid-sized brokers could have a tough time growing organically if U.S. commercial pricing falls. For AJG in particular, its tax credit producing clean coal business is likely to suffer under the next administration.