Travelers Stock Was Down 8% In A Day. Why?

Core Viewpoint - Travelers Companies, Inc. reported second quarter results that missed street estimates, leading to an 8% drop in stock price, despite year-on-year revenue growth [1][2] Financial Performance - Total revenues for Travelers in Q2 2024 reached $11.2 billion, reflecting a 12% year-on-year increase, driven by an 11% growth in premiums and a 24% increase in net investment income [2] - The company's net income improved significantly from -$ 14 million to $534 million in Q2 2024 [2] - For FY 2023, total revenues grew 12% year-on-year to$ 41.3 billion, with net income rising by 5% to $2.99 billion [3] Premiums and Investment Income - Premiums increased by 11% in business insurance and 12% in personal insurance segments, contributing to the overall revenue growth [2] - Net investment income benefited from improved average invested assets and net investment yield [2] Future Outlook - Revenues are projected to reach$ 45.6 billion in FY 2024, with an expected growth in adjusted net income margin [3] - The annual GAAP EPS is estimated at $16.97, with a P/E multiple just above 13x, leading to a valuation of$ 224 per share [3] Stock Performance Comparison - Travelers' stock has seen a 45% increase from $140 in early January 2021 to around$ 205, but has underperformed the S&P 500 in 2021 and 2023 [2] - The stock's returns were 11% in 2021, 20% in 2022, and 2% in 2023, compared to S&P 500 returns of 27%, -19%, and 24% respectively [2]