Back to top

Analyst Blog

We expect property and casualty insurer RLI Corp.  (RLI - Analyst Report) to beat expectations when it reports its first-quarter 2014 results on April 16.

Why a Likely Positive Surprise?

Our proven model shows that RLI Corp. is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP: Expected Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.85%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank: RLI Corp. has a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1, 2 and 3 have significantly higher chances of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

The combination of RLI Corp’s Zacks Rank #3 and +1.85% ESP makes us very confident in looking forward to a positive earnings beat on April 16.

What is Driving the Better-than-Expected Earnings?

Better market conditions and new product offerings aiding higher premiums, coupled with a benign cat environment favoring better underwriting results, are expected to drive RLI Corp. to outperform in the first quarter.

The positive trend is backed by the trailing three-quarter average surprise of 29.1%, much of which was contributed by the 48.9% surprise achieved in the third quarter of 2013. Better underwriting results continue to aid the company’s performance.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this coming quarter:  

Everest Re Group Ltd. (RE - Analyst Report), earnings ESP of +16.67% and a Zacks Rank #1 (Strong Buy).

RenaissanceRe Holdings Ltd. (RNR - Analyst Report), earnings ESP of +13.36% and a Zacks Rank #1.

ACE Limited (ACE - Analyst Report) earnings ESP of +3.32% and a Zacks Rank #1.

Read the Full Research Report on RLI
Read the Full Research Report on ACE
Read the Full Research Report on RNR
Read the Full Research Report on RE


Zacks Investment Research

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.44 +5.21%
BITAUTO HOL… BITA 81.71 +5.12%
CTPARTNERS… CTP 16.66 +4.26%
CHINA BIOLO… CBPO 47.91 +3.30%
MALLINCKROD… MNK 72.94 +2.85%