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Reinsurance Group Trades Below 50-Day SMA: How to Play the Stock?
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Key Takeaways
RGA's in-force portfolio and product expansion support long-term earnings diversification.
Net investment income growth is fueled by a larger asset base and stronger returns.
RGA's rising debt highlights elevated leverage and pressure on financial flexibility.
Reinsurance Group of America (RGA - Free Report) has been trading below its 50-day simple moving average (SMA), signaling a short-term bearish trend.
The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.
RGA’s Price Performance
Shares of Reinsurance Grouphave lost 11.4% against the industry’s gain of 1.3% in the year-to-date period. The Finance sector and the Zacks S&P 500 Composite have gained 13.9% and 12.8%, respectively, in the same time frame.
Image Source: Zacks Investment Research
RGA Shares Are Affordable
RGA shares are trading at a discount to the industry. Its price-to-book value of 1.03X is lower than the industry average of 1.93X.
The insurer has a market capitalization of $12.5 billion. The average volume of shares traded in the last three months was 0.4 million. The insurer has a Value Score of A.
Image Source: Zacks Investment Research
However, shares of other life insurers like Sun Life Financial Inc. (SLF - Free Report) and Primerica, Inc. (PRI - Free Report) are trading at a multiple higher than the industry average, while Manulife Financial Corp. (MFC - Free Report) shares are trading at a discount.
Projections for RGA
The Zacks Consensus Estimate for 2025 revenues is pegged at $23.5 billion, implying a year-over-year improvement of 3%. The consensus estimate for RGA’s current-year earnings is pegged at $22.40 per share, down 0.8% from the year-ago reported figure. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.6% and 10.5%, respectively, from 2025 estimates.
Mixed Analyst Sentiment on RGA
The Zacks Consensus Estimate for 2025 earnings has moved down 1.5% in the past 30 days, while the estimate for 2026 earnings has moved up 0.4% for the same time frame.
Image Source: Zacks Investment Research
Average Target Price for RGA Suggests Upside
Based on short-term price targets offered by 10 analysts, the Zacks average price target is $235 per share. The average indicates a potential 22.3% upside from the last closing price.
Image Source: Zacks Investment Research
Key Points to Note for RGA
RGA benefits from a balanced mix of organic initiatives and transactional opportunities, complemented by its expanding international footprint. Its individual mortality business continues to provide a solid foundation for earnings, while broader strategic efforts around products, partnerships and market reach are shaping the company’s growth trajectory.
RGA’s in-force portfolio carries substantial embedded value, offering a clear path to steady long-term earnings. Broader product expansion adds another layer of diversification, reducing concentration risks. Backed by an experienced management team, the company remains well-positioned to pursue attractive block transactions. Going forward, advancements in product design, underwriting, analytics and innovation are expected to be consistent drivers of growth.
RGA’s well-diversified portfolio across asset classes, sectors, issuers, and geographies positions it for steady growth. Net investment income has registered a 17.2% CAGR from 2016 to 2024, supported by a larger asset base, higher risk-free rates and stronger returns from alternative and private assets. In the second quarter, income after expenses rose 30.1% year over year to $1.4 billion, with the average yield up 66 basis points. The improving interest rate environment could potentially enhance investment performance going forward.
While RGA demonstrates strong growth drivers, several factors could act as near-term headwinds. Rising expenses may constrain margin expansion, and volatility from foreign exchange movements could further pressure profitability.
RGA’s debt has been on the rise in recent years, with long-term borrowings reaching $5.73 billion as of June 30, 2025, a 13.7% increase from the end of 2024. Its debt-to-capital ratio for the trailing 12 months stood at 47.22, well above the industry average of 16.79, highlighting elevated leverage and potential pressure on margins and financial flexibility.
Wealth Distribution of RGA
RGA continues to emphasize shareholder value creation through steady capital returns. The company has increased its dividend five times over the past five years, resulting in a five-year annualized growth rate of 6.3%, with a current payout ratio of 17%.
Conclusion
Overall, RGA is supported by a diverse business mix, an expanding global reach, and healthy investment returns that underpin its long-term growth prospects. However, mounting expenses, rising leverage, and currency headwinds pose challenges that could limit near-term profitability.
Image: Bigstock
Reinsurance Group Trades Below 50-Day SMA: How to Play the Stock?
Key Takeaways
Reinsurance Group of America (RGA - Free Report) has been trading below its 50-day simple moving average (SMA), signaling a short-term bearish trend.
The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.
RGA’s Price Performance
Shares of Reinsurance Grouphave lost 11.4% against the industry’s gain of 1.3% in the year-to-date period. The Finance sector and the Zacks S&P 500 Composite have gained 13.9% and 12.8%, respectively, in the same time frame.
RGA Shares Are Affordable
RGA shares are trading at a discount to the industry. Its price-to-book value of 1.03X is lower than the industry average of 1.93X.
The insurer has a market capitalization of $12.5 billion. The average volume of shares traded in the last three months was 0.4 million. The insurer has a Value Score of A.
However, shares of other life insurers like Sun Life Financial Inc. (SLF - Free Report) and Primerica, Inc. (PRI - Free Report) are trading at a multiple higher than the industry average, while Manulife Financial Corp. (MFC - Free Report) shares are trading at a discount.
Projections for RGA
The Zacks Consensus Estimate for 2025 revenues is pegged at $23.5 billion, implying a year-over-year improvement of 3%. The consensus estimate for RGA’s current-year earnings is pegged at $22.40 per share, down 0.8% from the year-ago reported figure. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.6% and 10.5%, respectively, from 2025 estimates.
Mixed Analyst Sentiment on RGA
The Zacks Consensus Estimate for 2025 earnings has moved down 1.5% in the past 30 days, while the estimate for 2026 earnings has moved up 0.4% for the same time frame.
Average Target Price for RGA Suggests Upside
Based on short-term price targets offered by 10 analysts, the Zacks average price target is $235 per share. The average indicates a potential 22.3% upside from the last closing price.
Key Points to Note for RGA
RGA benefits from a balanced mix of organic initiatives and transactional opportunities, complemented by its expanding international footprint. Its individual mortality business continues to provide a solid foundation for earnings, while broader strategic efforts around products, partnerships and market reach are shaping the company’s growth trajectory.
RGA’s in-force portfolio carries substantial embedded value, offering a clear path to steady long-term earnings. Broader product expansion adds another layer of diversification, reducing concentration risks. Backed by an experienced management team, the company remains well-positioned to pursue attractive block transactions. Going forward, advancements in product design, underwriting, analytics and innovation are expected to be consistent drivers of growth.
RGA’s well-diversified portfolio across asset classes, sectors, issuers, and geographies positions it for steady growth. Net investment income has registered a 17.2% CAGR from 2016 to 2024, supported by a larger asset base, higher risk-free rates and stronger returns from alternative and private assets. In the second quarter, income after expenses rose 30.1% year over year to $1.4 billion, with the average yield up 66 basis points. The improving interest rate environment could potentially enhance investment performance going forward.
While RGA demonstrates strong growth drivers, several factors could act as near-term headwinds. Rising expenses may constrain margin expansion, and volatility from foreign exchange movements could further pressure profitability.
RGA’s debt has been on the rise in recent years, with long-term borrowings reaching $5.73 billion as of June 30, 2025, a 13.7% increase from the end of 2024. Its debt-to-capital ratio for the trailing 12 months stood at 47.22, well above the industry average of 16.79, highlighting elevated leverage and potential pressure on margins and financial flexibility.
Wealth Distribution of RGA
RGA continues to emphasize shareholder value creation through steady capital returns. The company has increased its dividend five times over the past five years, resulting in a five-year annualized growth rate of 6.3%, with a current payout ratio of 17%.
Conclusion
Overall, RGA is supported by a diverse business mix, an expanding global reach, and healthy investment returns that underpin its long-term growth prospects. However, mounting expenses, rising leverage, and currency headwinds pose challenges that could limit near-term profitability.
Given the mixed analysts’ sentiment and price erosion, we prefer to remain cautious on this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.