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Everest Re (RE) Rallies 22% YTD: Can It Retain the Momentum?
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Shares of Everest Re Group Limited have rallied 22.4% year to date, outperforming the industry’s increase of 4.6%. The Finance sector and the Zacks S&P 500 composite have declined 15.2% and 20%, respectively, in the same time frame. With a market capitalization of $13.1 billion, the average volume of shares traded in the last three months was about 0.3 million.
New business growth, strong renewal retention, continued favorable rate increases and a solid capital position continue to drive this Zacks Rank #3 (Hold) insurer. This seventh-largest global property and casualty reinsurer has a decent history of delivering positive surprises in three of the last four reported quarters.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Everest Re’s 2023 earnings is pegged at $40.60 per share, indicating a 72.8% increase from the year-ago reported figure on 12.9% higher revenues of $14 billion. The expected long-term earnings growth rate is 13.5%, better than the industry average of 9.7%.
Everest Re remains focused on having a mix of product lines with better rate adequacy and higher long-term margins. Its diversified income streams ensure profitability. The insurer estimates gross written premium to witness a three-year CAGR of 10-15%.
New business growth, strong renewal retention and continued favorable rate increases should benefit the Insurance segment. RE estimates gross written premium at this segment to record a three-year CAGR of 8-22%.
Strategic partnerships with core clients and its position as a preferred reinsurance partner poise the Reinsurance segment well for growth. RE estimates gross written premium at this segment to witness a three-year CAGR of crease 8-12%.
Given prudent underwriting, RE aims a low-90 combined ratio in 2023.
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.
These, in turn, help in deploying capital for organic growth as well as pursuing strategic acquisitions apart from buying back shares and paying out dividends.
Banking on its operational strength and strong capital position, 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. 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%.
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders fund, has been improving over the last several years. RE’s trailing 12-month ROE of 7.5% is better than the industry average of 5.6%.
Everest Re has a VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
American Financial’s earnings surpassed estimates in all the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 0.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings indicates a respective year-over-year increase of 0.2% and 2.9%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.8% and 23.8%.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 32.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.
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Everest Re (RE) Rallies 22% YTD: Can It Retain the Momentum?
Shares of Everest Re Group Limited have rallied 22.4% year to date, outperforming the industry’s increase of 4.6%. The Finance sector and the Zacks S&P 500 composite have declined 15.2% and 20%, respectively, in the same time frame. With a market capitalization of $13.1 billion, the average volume of shares traded in the last three months was about 0.3 million.
New business growth, strong renewal retention, continued favorable rate increases and a solid capital position continue to drive this Zacks Rank #3 (Hold) insurer. This seventh-largest global property and casualty reinsurer has a decent history of delivering positive surprises in three of the last four reported quarters.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Everest Re’s 2023 earnings is pegged at $40.60 per share, indicating a 72.8% increase from the year-ago reported figure on 12.9% higher revenues of $14 billion. The expected long-term earnings growth rate is 13.5%, better than the industry average of 9.7%.
Everest Re remains focused on having a mix of product lines with better rate adequacy and higher long-term margins. Its diversified income streams ensure profitability. The insurer estimates gross written premium to witness a three-year CAGR of 10-15%.
New business growth, strong renewal retention and continued favorable rate increases should benefit the Insurance segment. RE estimates gross written premium at this segment to record a three-year CAGR of 8-22%.
Strategic partnerships with core clients and its position as a preferred reinsurance partner poise the Reinsurance segment well for growth. RE estimates gross written premium at this segment to witness a three-year CAGR of crease 8-12%.
Given prudent underwriting, RE aims a low-90 combined ratio in 2023.
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.
These, in turn, help in deploying capital for organic growth as well as pursuing strategic acquisitions apart from buying back shares and paying out dividends.
Banking on its operational strength and strong capital position, 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. 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%.
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders fund, has been improving over the last several years. RE’s trailing 12-month ROE of 7.5% is better than the industry average of 5.6%.
Everest Re has a VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are American Financial Group, Inc. (AFG - Free Report) , Root, Inc. (ROOT - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Financial’s earnings surpassed estimates in all the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 0.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings indicates a respective year-over-year increase of 0.2% and 2.9%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.8% and 23.8%.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 32.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.