It has been about a month since the last earnings report for Everest Re . Shares have lost about 6.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Everest Re due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Everest Re Q4 Earnings & Revenues Lag Estimates, Up Y/Y
Everest Re Group, Ltd. reported fourth-quarter 2021 operating income per share of $9.23, missing the Zacks Consensus Estimate by 1.2%. The bottom line rebounded from the year-ago loss of $1.12.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided increased underwriting income, driving combined ratio.
Operational Update
Everest Re’s total operating revenues of nearly $2 billion increased 16.4% year over year on higher premiums earned. The top line missed the consensus estimate by a whisker.
Gross written premiums improved 25% year over year to $3.4 billion. The Reinsurance segment generated premiums of $2.4 billion, up 26% year over year, driven by the continued partnership with its core clients, Everest’s position as a preferred reinsurance platform and an improved rate. The Insurance segment generated a premium of $2.3 billion, up 21% year over year, driven by strong new business generation, primarily in casualty and professional liability lines, improved rates and exposure growth. Net investment income was $171 million, down 12.4% % year over year.
Total claims and expenses decreased 0.8% to $2.6 billion primarily due to lower incurred losses and loss adjustment expenses.
Underwriting income of $228 million in the quarter rebounded from the year-ago loss of $218.7 million.
Underwriting income for the Reinsurance segment was $176.4 million, rebounding from the year-ago loss of $218.7 million. The underwriting income of the Insurance segment was $51.9 million, up nearly nine times.
The combined ratio improved1720 basis points year over year to 91.9 in the reported quarter. The combined ratio of the Reinsurance segment improved 2090 bps to 91.5 while the same improved 620 bps to 92.8 for the Insurance segment.
Full Year Update
Operating income per share of $28.97 jumped nearly four-fold year over year.
Total operating revenues of nearly $11.6 billion increased 26.1% year over year. Gross written premium increased 25% year over year, driven by a 25% rise in premium at Reinsurance, and 24% at Insurance. Combined ratio of 97.1 improved 540 basis points.
Financial Update
Everest Re exited 2021 with total investments and cash of $29.7 billion, up 16.5% from the 2020 level. Shareholder equity at the end of the reported quarter increased 4.2% from 2020 end to about $10.1 billion.
Book value per share was $258.21 as of Dec 31, 2021, up 6.2% from the 2020-end level. The annualized net income return on equity was 12.2% compared with 3.4% in the year-ago period.
Everest Re’s cash flow from operations was $3.8 billion in 2021, up 31% year over year. Everest Re paid common share dividends of $246.7 million during the quarter and bought back shares worth $225 million in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Everest Re has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Everest Re has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Everest Re (RE) Down 6.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Everest Re . Shares have lost about 6.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Everest Re due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Everest Re Q4 Earnings & Revenues Lag Estimates, Up Y/Y
Everest Re Group, Ltd. reported fourth-quarter 2021 operating income per share of $9.23, missing the Zacks Consensus Estimate by 1.2%. The bottom line rebounded from the year-ago loss of $1.12.
Everest Re witnessed higher premiums across its reinsurance and insurance businesses. A not-so-active cat environment aided increased underwriting income, driving combined ratio.
Operational Update
Everest Re’s total operating revenues of nearly $2 billion increased 16.4% year over year on higher premiums earned. The top line missed the consensus estimate by a whisker.
Gross written premiums improved 25% year over year to $3.4 billion. The Reinsurance segment generated premiums of $2.4 billion, up 26% year over year, driven by the continued partnership with its core clients, Everest’s position as a preferred reinsurance platform and an improved rate. The Insurance segment generated a premium of $2.3 billion, up 21% year over year, driven by strong new business generation, primarily in casualty and professional liability lines, improved rates and exposure growth. Net investment income was $171 million, down 12.4% % year over year.
Total claims and expenses decreased 0.8% to $2.6 billion primarily due to lower incurred losses and loss adjustment expenses.
Underwriting income of $228 million in the quarter rebounded from the year-ago loss of $218.7 million.
Underwriting income for the Reinsurance segment was $176.4 million, rebounding from the year-ago loss of $218.7 million. The underwriting income of the Insurance segment was $51.9 million, up nearly nine times.
The combined ratio improved1720 basis points year over year to 91.9 in the reported quarter. The combined ratio of the Reinsurance segment improved 2090 bps to 91.5 while the same improved 620 bps to 92.8 for the Insurance segment.
Full Year Update
Operating income per share of $28.97 jumped nearly four-fold year over year.
Total operating revenues of nearly $11.6 billion increased 26.1% year over year. Gross written premium increased 25% year over year, driven by a 25% rise in premium at Reinsurance, and 24% at Insurance. Combined ratio of 97.1 improved 540 basis points.
Financial Update
Everest Re exited 2021 with total investments and cash of $29.7 billion, up 16.5% from the 2020 level. Shareholder equity at the end of the reported quarter increased 4.2% from 2020 end to about $10.1 billion.
Book value per share was $258.21 as of Dec 31, 2021, up 6.2% from the 2020-end level. The annualized net income return on equity was 12.2% compared with 3.4% in the year-ago period.
Everest Re’s cash flow from operations was $3.8 billion in 2021, up 31% year over year. Everest Re paid common share dividends of $246.7 million during the quarter and bought back shares worth $225 million in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Everest Re has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Everest Re has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.