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Here's Why You Should Add Everest Re (RE) to Your Kitty
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Everest Re Group, Ltd. is poised for expansion on new business growth, strong renewal retention, continued favorable rate increases, a solid capital position and favorable growth estimates. These make Everest Re stock worth adding to one’s portfolio.
Everest Re has a decent track record of beating earnings estimates. It beat the Zacks Consensus Estimate in two of the last four reported quarters while missing in two, delivering an average four-quarter earnings surprise of 6.70%.
Zacks Rank & Price Performance
Everest Re currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 3.3% against the industry’s decrease of 6.2%, the Finance sector’s decline of 10.3% and the Zacks S&P 500 composite’s decline of 12.4%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 1.2% and 6.7% north in the past 30 days, reflecting analyst optimism.
Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2022 earnings is pegged at $33.25 per share, indicating a 14.8% increase from the year-ago reported figure on 10.6% higher revenues of $12.8 billion. The consensus estimate for 2023 earnings is pegged at $41.78 per share, indicating a 25.6% increase from the year-ago reported figure on 10.8% higher revenues of $14.2 billion.
The expected long-term earnings growth is pegged at 10.9%.
Return on Equity
Return on equity (ROE), a profitability measure to identify how efficiently the company is utilizing its shareholders fund, has been improving over the last several years. Its trailing 12-month ROE of 7.5% is better than the industry average of 5.6%.
Style Score
Everest Re has an impressive VGM Score of B. This style score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth, and momentum.
Business Tailwinds
Everest Re has diversified income streams to ensure profitability. While the Insurance segment should benefit from new business growth, strong renewal retention and continued favorable rate increases, the Reinsurance segment is poised to grow on partnerships with core clients and its position as a preferred reinsurance partner.
This seventh-largest global property and casualty reinsurer is focused on building a portfolio, with a mix of product lines with better rate adequacy and higher long-term margins. The insurer stays focused on building a portfolio mix that has product lines with better rate adequacy and higher long-term margins.
Everest Re boasts a strong capital position, with sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
Effective Capital Deployment
Everest Re’s dividend has increased at a nine-year CAGR (2014-2022) of 9.2%. RE targets a total shareholder return of more than 13% by 2023.
Everest Re remains focused on deploying capital for organic growth as well as pursuing strategic acquisitions apart from buying back shares and paying out dividends.
Upbeat Guidance
Everest Re estimates the gross written premium to witness a three-year CAGR of 10-15%. The Reinsurance segment is expected to witness 8-12% growth while the Insurance segment is likely to witness a three-year CAGR of 8-22%.
RE aims a low-90 combined ratio in 2023.
Return on invested assets is projected between 2.75% and 3.25%, while the long-term debt leverage ratio is projected between 15% and 20%.
Attractive Valuation
RE shares are trading at a discount than the industry average. Its price-to-book value of 1.24X is lower than the industry average of 1.36X. Before valuation expands, it is preferable to take a position in the stock. It has a Value Score of A. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 14.4% and 5.9% year-over-year growth, respectively. The average four-quarter surprise is 17.55%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 7.6% and 8.8% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 6.9%.
American Financial’s earnings surpassed estimates in the last four quarters, the average earnings surprise being 37.09%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 1% each north, respectively, in the past 30 days. Year to date, shares of AFG have lost 5.4%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings implies 20.6% and 10.4% year-over-year growth, respectively. The average four-quarter surprise is 29.95%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 8.8% and 6.8% north in the past 60 days, respectively. Year to date, shares of WRB have rallied 21.5%.
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Here's Why You Should Add Everest Re (RE) to Your Kitty
Everest Re Group, Ltd. is poised for expansion on new business growth, strong renewal retention, continued favorable rate increases, a solid capital position and favorable growth estimates. These make Everest Re stock worth adding to one’s portfolio.
Everest Re has a decent track record of beating earnings estimates. It beat the Zacks Consensus Estimate in two of the last four reported quarters while missing in two, delivering an average four-quarter earnings surprise of 6.70%.
Zacks Rank & Price Performance
Everest Re currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 3.3% against the industry’s decrease of 6.2%, the Finance sector’s decline of 10.3% and the Zacks S&P 500 composite’s decline of 12.4%.
Image Source: Zacks Investment Research
Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 1.2% and 6.7% north in the past 30 days, reflecting analyst optimism.
Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2022 earnings is pegged at $33.25 per share, indicating a 14.8% increase from the year-ago reported figure on 10.6% higher revenues of $12.8 billion. The consensus estimate for 2023 earnings is pegged at $41.78 per share, indicating a 25.6% increase from the year-ago reported figure on 10.8% higher revenues of $14.2 billion.
The expected long-term earnings growth is pegged at 10.9%.
Return on Equity
Return on equity (ROE), a profitability measure to identify how efficiently the company is utilizing its shareholders fund, has been improving over the last several years. Its trailing 12-month ROE of 7.5% is better than the industry average of 5.6%.
Style Score
Everest Re has an impressive VGM Score of B. This style score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth, and momentum.
Business Tailwinds
Everest Re has diversified income streams to ensure profitability. While the Insurance segment should benefit from new business growth, strong renewal retention and continued favorable rate increases, the Reinsurance segment is poised to grow on partnerships with core clients and its position as a preferred reinsurance partner.
This seventh-largest global property and casualty reinsurer is focused on building a portfolio, with a mix of product lines with better rate adequacy and higher long-term margins. The insurer stays focused on building a portfolio mix that has product lines with better rate adequacy and higher long-term margins.
Everest Re boasts a strong capital position, with sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
Effective Capital Deployment
Everest Re’s dividend has increased at a nine-year CAGR (2014-2022) of 9.2%. RE targets a total shareholder return of more than 13% by 2023.
Everest Re remains focused on deploying capital for organic growth as well as pursuing strategic acquisitions apart from buying back shares and paying out dividends.
Upbeat Guidance
Everest Re estimates the gross written premium to witness a three-year CAGR of 10-15%. The Reinsurance segment is expected to witness 8-12% growth while the Insurance segment is likely to witness a three-year CAGR of 8-22%.
RE aims a low-90 combined ratio in 2023.
Return on invested assets is projected between 2.75% and 3.25%, while the long-term debt leverage ratio is projected between 15% and 20%.
Attractive Valuation
RE shares are trading at a discount than the industry average. Its price-to-book value of 1.24X is lower than the industry average of 1.36X. Before valuation expands, it is preferable to take a position in the stock. It has a Value Score of A. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Berkshire Hathaway (BRK.B - Free Report) , American Financial Group (AFG - Free Report) and W.R. Berkley Corporation (WRB - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 14.4% and 5.9% year-over-year growth, respectively. The average four-quarter surprise is 17.55%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 7.6% and 8.8% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 6.9%.
American Financial’s earnings surpassed estimates in the last four quarters, the average earnings surprise being 37.09%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 1% each north, respectively, in the past 30 days. Year to date, shares of AFG have lost 5.4%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings implies 20.6% and 10.4% year-over-year growth, respectively. The average four-quarter surprise is 29.95%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 8.8% and 6.8% north in the past 60 days, respectively. Year to date, shares of WRB have rallied 21.5%.