Old Republic International Corp. (ORI) climbed the most since May as Raymond James & Associates upgraded the insurer to outperform, saying its main mortgage- insurance unit may avoid being put into receivership.
Old Republic jumped 4.6 percent to $10.54 at 4:01 p.m. in New York. The Chicago-based insurer has advanced 14 percent this year, matching the gains of the 400-member Standard & Poor’s Midcap 400 Index. (MID)
Raymond James upgraded the company after attending a hearing in North Carolina addressing the corrective-action plan on the insurer’s mortgage-guaranty unit. The state Department of Insurance put Old Republic under supervision rather than receivership.
“We believe the accelerated prepayment risk for the company’s convertible debt is off the table,” C. Gregory Peters, an analyst at Raymond James, said in a note today. “Therefore, we are upgrading the stock based on its attractive valuation and dividend yield.”
The Department of Insurance is expected to issue a final plan in the next few weeks, according to Raymond James. The firm has a $12 target price on Old Republic and lifted its rating from market perform.
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