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Reasons Why Investors Should Retain Arch Capital (ACGL) Stock
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Arch Capital Group Ltd. (ACGL - Free Report) has been favored by investors on the back of its new business opportunities, rate increases, solid growth within professional liability and travel business units and solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $4.58 and $5.48, indicating year-over-year increases of 27.9% and 19.6%, respectively. The expected long-term earnings growth rate is pegged at 10%.
Northbound Estimate Revision
Estimates for 2023 have moved up nearly 0.4% in the past seven days, reflecting investor optimism.
Earnings Surprise History
Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 11% against the industry’s decline of 1.8%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Arch Capital’s ROE for the trailing 12 months is 14.4%, up 650 basis points year over year and reflecting its efficiency in utilizing shareholders’ funds.
Style Score
Arch Capital has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Solid performances across the Insurance, Reinsurance and Mortgage segments of Arch Capital are likely to drive the top line in the days ahead.
Premiums in the Insurance segment stand to gain from solid growth within professional liability and travel business units in both North America and internationally. New business opportunities as well as growth in existing accounts are expected to boost the Insurance segment.
Rate improvements should continue to expand writings in the property casualty segment.
Growth in the Reinsurance segment was primarily driven by casualty and other specialty lines. Rate increases, new business opportunities and growth in existing accounts should benefit revenue growth.
The mortgage segment stands to benefit from increased persistency of enforce insurance and growth in credit risk transfer portfolio.
Arch Capital, being the leading Specialty P&C and Mortgage insurer, has made significant efforts to boost its inorganic growth through buyouts. Strategic acquisitions have enabled the insurer to expand internationally, added capabilities, enhanced operations and diversified business.
The P&C insurer’s robust capital and liquidity position reflects financial flexibility and protects it from market volatility. It enables ACGL to retain the financial strength required to pursue new opportunities in keeping with its long-term strategy.
Riding on its sound capital position, the insurer engages in several shareholder-friendly moves. As of Jun 30, 2022, nearly $606.6 million of shares were available under the program, which may be repurchased from time to time in open market or privately negotiated transactions.
Radian Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 29.51%.
The Zacks Consensus Estimate for RDN’s 2023 earnings has moved 5.3% north in the past 60 days. In the past year, the insurer has lost 15.4%.
The bottom line of Berkshire Hathaway surpassed earnings estimates in three of the last four quarters and missed in one, the average being 17.55%. In the past year, BRK.B has lost 3.5%.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings has moved 2% and 0.6% north, respectively, in the past 30 days.
The bottom line of Root surpassed earnings estimates in each of the last four quarters, the average being 22.4%. In the past year, ROOT has lost 91.3%.
The Zacks Consensus Estimate for Root’s 2022 and 2023 earnings indicates a 39.1% and 25.2% increase, respectively, from the year-ago reported figure.
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Reasons Why Investors Should Retain Arch Capital (ACGL) Stock
Arch Capital Group Ltd. (ACGL - Free Report) has been favored by investors on the back of its new business opportunities, rate increases, solid growth within professional liability and travel business units and solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $4.58 and $5.48, indicating year-over-year increases of 27.9% and 19.6%, respectively. The expected long-term earnings growth rate is pegged at 10%.
Northbound Estimate Revision
Estimates for 2023 have moved up nearly 0.4% in the past seven days, reflecting investor optimism.
Earnings Surprise History
Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 11% against the industry’s decline of 1.8%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Arch Capital’s ROE for the trailing 12 months is 14.4%, up 650 basis points year over year and reflecting its efficiency in utilizing shareholders’ funds.
Style Score
Arch Capital has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Solid performances across the Insurance, Reinsurance and Mortgage segments of Arch Capital are likely to drive the top line in the days ahead.
Premiums in the Insurance segment stand to gain from solid growth within professional liability and travel business units in both North America and internationally. New business opportunities as well as growth in existing accounts are expected to boost the Insurance segment.
Rate improvements should continue to expand writings in the property casualty segment.
Growth in the Reinsurance segment was primarily driven by casualty and other specialty lines. Rate increases, new business opportunities and growth in existing accounts should benefit revenue growth.
The mortgage segment stands to benefit from increased persistency of enforce insurance and growth in credit risk transfer portfolio.
Arch Capital, being the leading Specialty P&C and Mortgage insurer, has made significant efforts to boost its inorganic growth through buyouts. Strategic acquisitions have enabled the insurer to expand internationally, added capabilities, enhanced operations and diversified business.
The P&C insurer’s robust capital and liquidity position reflects financial flexibility and protects it from market volatility. It enables ACGL to retain the financial strength required to pursue new opportunities in keeping with its long-term strategy.
Riding on its sound capital position, the insurer engages in several shareholder-friendly moves. As of Jun 30, 2022, nearly $606.6 million of shares were available under the program, which may be repurchased from time to time in open market or privately negotiated transactions.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Radian Group Inc. (RDN - Free Report) , Berkshire Hathaway Inc. (BRK.B - Free Report) and Root, Inc. (ROOT - Free Report) . While Radian and Berkshire Hathaway sport a Zacks Rank #1 (Strong Buy), Root carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Radian Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 29.51%.
The Zacks Consensus Estimate for RDN’s 2023 earnings has moved 5.3% north in the past 60 days. In the past year, the insurer has lost 15.4%.
The bottom line of Berkshire Hathaway surpassed earnings estimates in three of the last four quarters and missed in one, the average being 17.55%. In the past year, BRK.B has lost 3.5%.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings has moved 2% and 0.6% north, respectively, in the past 30 days.
The bottom line of Root surpassed earnings estimates in each of the last four quarters, the average being 22.4%. In the past year, ROOT has lost 91.3%.
The Zacks Consensus Estimate for Root’s 2022 and 2023 earnings indicates a 39.1% and 25.2% increase, respectively, from the year-ago reported figure.