UPDATE 1-Credit Suisse slashes XL Capital price target to $4
Dec 11 (Reuters) - Credit Suisse slashed its price target on XL Capital Ltd (XL.N: Cotización) to $4 from $21 and said the company's mark-to-market losses should further pressure its capital and lead to possible downgrades by rating agencies.
On Wednesday, the Bermuda-based insurer said the mark-to-market decline on its investment portfolio in the weeks since the end of the third quarter appeared to be similar to the decline it had posted for the entire third quarter.
The company had also said it hired Goldman Sachs as an adviser to explore "value-enhancing opportunities available to it." [ID:nN10357257]
"We believe exploration of alternatives is in part a response to a weak capital position, since raising capital currently could be very difficult," Credit Suisse said in a research note. It has a "neutral" rating on the stock.
The brokerage reduced its fourth-quarter earnings estimate for the company to 15 cents from 95 cents a share.
XL shares were trading down more than 8 percent at $3.58 in morning trade on the New York Stock Exchange. (Reporting by Supantha Mukherjee in Bangalore; Editing by Aradhana Aravindan)
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