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Reasons Why Arch Capital (ACGL) Stock Is an Attractive Pick
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Arch Capital Group Ltd. (ACGL - Free Report) has been in investors’ good books owing to new business opportunities, rate increases, solid growth within professional liability and travel business units and a solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share is pegged at $6.85, indicating a year-over-year increase of 13.5%. The expected long-term earnings growth rate is pegged at 10%.
Northbound Estimate Revision
Estimates for 2023 and 2024 have moved up nearly 7.7% and 9% 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 24.17%.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 44% compared with the industry’s increase of 0.6%.
Image Source: Zacks Investment Research
Style Score
Arch Capital has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities in the value investing space.
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.
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 the increased persistence of enforced insurance and growth in the credit risk transfer portfolio.
The rising interest rate environment should help drive the net investment income through 2023. Going forward with new money rates in fixed income portfolio in the range of 4.5% to 5% and a growing base of invested assets, the insure expects to deliver an increasing level of investment income to help boost the bottom line. In 2022, net investment income increased 43.2% year over year to $496.5 million.
ACGL has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
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 has maintained a robust capital position over the years, reflecting its financial flexibility. ACGL’s robust capital and liquidity position shield it from market volatility, enabling it to retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy.
Arch Capital has an impressive Value Score of A, reflecting an attractive valuation of the stock.
Other Stocks to Consider
Some top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and CNA Financial Corporation (CNA - Free Report) . While Axis Capital and Everest Re sport a Zacks Rank #1, CNA Financial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for both 2023 and 2024 has moved 0.1% north in the past seven days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating a year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 9%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $44.68 and $51.29, indicating a year-over-year increase of 64.9% and 14.7%, respectively. In the past year, RE has gained 25.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for CNA Financials’ 2023 and 2024 earnings per share is pegged at $4.25 and $4.41, indicating a year-over-year increase of 10.6% and 3.8%, respectively. In the past year, CNA has lost 9%.
The Zacks Consensus Estimate for CNA’s 2023 and 2024 earnings has moved 4.2% and 14.8% north in the past 30 days.
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Reasons Why Arch Capital (ACGL) Stock Is an Attractive Pick
Arch Capital Group Ltd. (ACGL - Free Report) has been in investors’ good books owing to new business opportunities, rate increases, solid growth within professional liability and travel business units and a solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2024 earnings per share is pegged at $6.85, indicating a year-over-year increase of 13.5%. The expected long-term earnings growth rate is pegged at 10%.
Northbound Estimate Revision
Estimates for 2023 and 2024 have moved up nearly 7.7% and 9% 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 24.17%.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 44% compared with the industry’s increase of 0.6%.
Image Source: Zacks Investment Research
Style Score
Arch Capital has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities in the value investing space.
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.
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 the increased persistence of enforced insurance and growth in the credit risk transfer portfolio.
The rising interest rate environment should help drive the net investment income through 2023. Going forward with new money rates in fixed income portfolio in the range of 4.5% to 5% and a growing base of invested assets, the insure expects to deliver an increasing level of investment income to help boost the bottom line. In 2022, net investment income increased 43.2% year over year to $496.5 million.
ACGL has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
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 has maintained a robust capital position over the years, reflecting its financial flexibility. ACGL’s robust capital and liquidity position shield it from market volatility, enabling it to retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy.
Arch Capital has an impressive Value Score of A, reflecting an attractive valuation of the stock.
Other Stocks to Consider
Some top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and CNA Financial Corporation (CNA - Free Report) . While Axis Capital and Everest Re sport a Zacks Rank #1, CNA Financial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for both 2023 and 2024 has moved 0.1% north in the past seven days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating a year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 9%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $44.68 and $51.29, indicating a year-over-year increase of 64.9% and 14.7%, respectively. In the past year, RE has gained 25.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for CNA Financials’ 2023 and 2024 earnings per share is pegged at $4.25 and $4.41, indicating a year-over-year increase of 10.6% and 3.8%, respectively. In the past year, CNA has lost 9%.
The Zacks Consensus Estimate for CNA’s 2023 and 2024 earnings has moved 4.2% and 14.8% north in the past 30 days.