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Kinsale (KNSL) Up 47.5% in a Year: Can It Maintain the Upside?
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Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 47.5% in a year against the industry's decrease of 3.3%. The Zacks S&P 500 composite decreased 10.6% in the said time frame. With a market capitalization of $7.4 billion, the average volume of shares traded in the last three months was 0.2 million.
Image Source: Zacks Investment Research The rally was largely driven by rate increases, a strong underwriting environment and higher submission activity.
This Zacks Rank #1 (Strong Buy) insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $9.86, indicating a 26.4% increase from the year-ago reported figure on 32.2% higher revenues of $1.08 billion. The consensus estimate for 2024 earnings is pegged at $11.85, indicating a 20.2% increase from the year-ago reported figure on 19.6% higher revenues of $1.30 billion.
The insurer’s annualized operating return on equity (ROE) expanded 420 basis points year over year to 25% in 2022. Growth in the business from favorable market conditions, rate increases and a decrease in average stockholders' equity are likely to drive the ROE.
Kinsale Capital’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and higher rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting combined with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and lower other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable Kinsale Capital to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividends since 2017 at an eight-year CAGR (2016-2023) of 13.7%.
The Zacks Consensus Estimate for 2024 has moved 8.7% north in the past 30 days, reflecting analysts’ optimism.
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 14.7%.
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 34.2%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating a year-over-year increase of 30.6% and 14.9%, respectively. In the past year, SIGI has gained 21.1%.
The Zacks Consensus Estimate for SIGI’s 2023 and 2024 earnings has moved 8.9% and 9.7% north, respectively, in the past 30 days.
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Kinsale (KNSL) Up 47.5% in a Year: Can It Maintain the Upside?
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 47.5% in a year against the industry's decrease of 3.3%. The Zacks S&P 500 composite decreased 10.6% in the said time frame. With a market capitalization of $7.4 billion, the average volume of shares traded in the last three months was 0.2 million.
Image Source: Zacks Investment Research
The rally was largely driven by rate increases, a strong underwriting environment and higher submission activity.
This Zacks Rank #1 (Strong Buy) insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $9.86, indicating a 26.4% increase from the year-ago reported figure on 32.2% higher revenues of $1.08 billion. The consensus estimate for 2024 earnings is pegged at $11.85, indicating a 20.2% increase from the year-ago reported figure on 19.6% higher revenues of $1.30 billion.
The insurer’s annualized operating return on equity (ROE) expanded 420 basis points year over year to 25% in 2022. Growth in the business from favorable market conditions, rate increases and a decrease in average stockholders' equity are likely to drive the ROE.
Kinsale Capital’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and higher rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting combined with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and lower other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable Kinsale Capital to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividends since 2017 at an eight-year CAGR (2016-2023) of 13.7%.
The Zacks Consensus Estimate for 2024 has moved 8.7% north in the past 30 days, reflecting analysts’ optimism.
Other Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and Selective Insurance Group, Inc. (SIGI - Free Report) , each sporting a Zacks Rank #1. 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 14.7%.
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 34.2%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating a year-over-year increase of 30.6% and 14.9%, respectively. In the past year, SIGI has gained 21.1%.
The Zacks Consensus Estimate for SIGI’s 2023 and 2024 earnings has moved 8.9% and 9.7% north, respectively, in the past 30 days.