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Arch Capital (ACGL) to Report Q2 Earnings: Is a Beat in Store?
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Arch Capital Group Ltd. (ACGL - Free Report) is slated to report second-quarter 2023 earnings on Jul 26, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average beat being 28.47%.
Factors to Consider
Premiums in the second quarter are expected to have benefited from growth in most lines of business, primarily related to rate increases, new business opportunities and gain in existing accounts in the Insurance and the Reinsurance segments. The Zacks Consensus Estimate for net premiums earned is pegged at $2.9 billion, indicating an increase of 25.4% from the year-ago reported figure. We expect net premiums earned to increase 13.9% to $2.6 billion.
Net investment income is likely to have benefited from higher yields available in the financial market in the to-be-reported quarter. Arch Capital expects further improvement in net investment income returns in the second quarter. We expect net investment income to increase 8.3% to $115.3 million.
The Zacks Consensus Estimate for investment income is pegged at $155 million, indicating a 74.5% increase from the year-ago reported figure.
The top line is likely to have benefited from improved earned premiums and higher net investment income. The Zacks Consensus Estimate for revenues is pegged at $3.13 billion, indicating an increase of 29.7% from the year-ago reported figure.
Expenses are expected to have increased on higher losses and loss adjustment expenses, acquisition expenses and other operating expenses. We expect total expenses to increase 10.8% to $1.9 billion.
ACGL is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for combined ratio is pegged at 80, indicating a deterioration of 300 basis points from the year-ago reported figure.
The Zacks Consensus Estimate for second-quarter 2023 earnings of $1.65 per share indicates an increase of 23.1% from the year-ago quarter’s reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Arch Capital has an Earnings ESP of +1.57%. This is because the Most Accurate Estimate of $1.57 is pegged higher than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $11.10, indicating a year-over-year increase of 13.3%.
EG’s earnings beat estimates in three of the last four quarters and missed in the other one.
Goosehead Insurance (GSHD - Free Report) has an Earnings ESP of +20.81% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at 30 cents, indicating a year-over-year increase of 87.5%.
GSHD’s earnings beat estimates in two of the last four quarters and missed in the other two.
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Arch Capital (ACGL) to Report Q2 Earnings: Is a Beat in Store?
Arch Capital Group Ltd. (ACGL - Free Report) is slated to report second-quarter 2023 earnings on Jul 26, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average beat being 28.47%.
Factors to Consider
Premiums in the second quarter are expected to have benefited from growth in most lines of business, primarily related to rate increases, new business opportunities and gain in existing accounts in the Insurance and the Reinsurance segments. The Zacks Consensus Estimate for net premiums earned is pegged at $2.9 billion, indicating an increase of 25.4% from the year-ago reported figure. We expect net premiums earned to increase 13.9% to $2.6 billion.
Net investment income is likely to have benefited from higher yields available in the financial market in the to-be-reported quarter. Arch Capital expects further improvement in net investment income returns in the second quarter. We expect net investment income to increase 8.3% to $115.3 million.
The Zacks Consensus Estimate for investment income is pegged at $155 million, indicating a 74.5% increase from the year-ago reported figure.
The top line is likely to have benefited from improved earned premiums and higher net investment income. The Zacks Consensus Estimate for revenues is pegged at $3.13 billion, indicating an increase of 29.7% from the year-ago reported figure.
Expenses are expected to have increased on higher losses and loss adjustment expenses, acquisition expenses and other operating expenses. We expect total expenses to increase 10.8% to $1.9 billion.
ACGL is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for combined ratio is pegged at 80, indicating a deterioration of 300 basis points from the year-ago reported figure.
The Zacks Consensus Estimate for second-quarter 2023 earnings of $1.65 per share indicates an increase of 23.1% from the year-ago quarter’s reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Arch Capital has an Earnings ESP of +1.57%. This is because the Most Accurate Estimate of $1.57 is pegged higher than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
Zacks Rank: ACGL currently carries a Zacks Rank #3.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.60, indicating a year-over-year decline of 11.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $11.10, indicating a year-over-year increase of 13.3%.
EG’s earnings beat estimates in three of the last four quarters and missed in the other one.
Goosehead Insurance (GSHD - Free Report) has an Earnings ESP of +20.81% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at 30 cents, indicating a year-over-year increase of 87.5%.
GSHD’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.