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On Aug 13, Zacks Investment Research upgraded Everest Re Group Ltd. (RE - Analyst Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Everest Re Group has been witnessing rising earnings estimates on the back of solid second-quarter results. Moreover, this property and casualty insurer delivered positive earnings surprises in the past 4 quarters with an average beat of 59.5%. The long-term expected earnings growth rate for this stock is 10%.

Everest Re Group reported second-quarter 2013 results on Jul 23. Operating net earnings of $5.10 per share were approximately 20% higher than the Zacks Consensus Estimate of $4.26 per share. Earnings were also up 20% year over year.

Earnings were primarily aided by solid top-line growth of 14.6%. The upside was driven by growth in premiums earned, which improved 11% year over year to $1.15 billion.   

Underwriting income of Everest Re Group improved 25% year over year to $143 million. The combined ratio improved to 87.6% from 89.0% in the year-ago quarter. Everest Re Group spent $211.3 million to buy back 1.6 million shares.

Operating cash flow improved 22.6% year over year to $170.2 million in the second quarter. Book value per share increased 4.1% to $136.31 as on Jun 30, 2013 from $130.96 as on Dec 31, 2012. Return on equity was 16.1%, better than 15.3% in 2012.

The Zacks Consensus Estimate for 2013 increased 6.4% to $18.04 per share as 8 of 9 estimates were revised higher over the last 30 days. For 2014, 8 of 9 estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 4.8% to $17.25 per share.

Other Stocks to Consider

Among other property and casualty insurers, Berkshire Hathaway Inc. (BRK.A - Snapshot Report) (BRK.B - Analyst Report), Global Indemnity plc (GBLI) and HCI Group, Inc. (HCI - Snapshot Report) also hold the same Zacks Rank #1 (Strong Buy) and look attractive.
 

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