Lehman Downgrades XL Capital to 'Buy'

Lehman Brothers downgraded XL Capital (XL

) and Allstate (ALL

) to buy from strong buy.

Analyst J. Paul Newsome says there are number of other insurers besides XL he would prefer to focus on at this time. With extremely strong first quarter top-line and a very good bottom-line, he believes investors probably have factored excellent future financial performance into XL stock, and its valuation is superior to its peers.

He notes he had hoped XL stock would have reached a higher level than it has today; says it has held up no better than many other insurers in the group. For XL, he sees EPS of $6.70 in 2002 and $8.25 in 2003. He maintained his $102 price target for XL shares.