Travelers: Raising Estimates and Price Target After a Strong Q3

We raise our 2026 EPS forecast by 6.1% to $36.53 on strong Q3 results and higher-than-expected share repurchases, lift 2027 and 2028 EPS to $29.34 and $29.99, and raise our price target to $384 from $363, valuing TRV at 2.0x our 2027 adjusted BVPS estimate of $191.90 (modified Gordon Growth framework: normalized ROE of 15.0% vs. 14.5% previously, 8.5% cost of equity, 2.0% long-term growth), equivalent to 13.1x 2027E EPS. Management guided the expense ratio to slightly below 29% in both 2026 and 2027; Q4 after-tax fixed income NII of $875m, FY2026 total of $3.3bn and more than $3.6bn in 2027, with new money rates roughly 120bps above the portfolio yield; and a higher cyber reinsurance quota share that reduces NPW by about $165m in Q4 and $230m for full-year 2027. Travelers remains one of the few insurers with positive EPS momentum, but decelerating pricing, a more tempered expense outlook and a peak multiple suggest limited further re-rating. Maintain Hold.