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Here's Why You Should Add Everest Re (RE) to Portfolio Now?
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Everest Re Group’s new business growth, strong renewal retention, continued favorable rate increases, solid capital position and upbeat guidance make it worth adding to one’s portfolio.
RE has a solid history of delivering positive surprises in the last four reported quarters, the average being 18.41%.
This seventh-largest global property and casualty reinsurer has a VGM Score of B. The Style Score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth, and most promising momentum.
Zacks Rank & Price Performance
Everest Re currently sports a Zacks Rank #1 (Strong Buy). Year to date, the stock has gained 5% against the industry’s decline of 3.7%.
Return on Equity
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. RE’s trailing 12-month ROE of 12.4% is better than the industry average of 6.5%.
Northbound Estimate Revisions
The Zacks Consensus estimate for 2023 and 2024 moved about 1% and 2.6% north in the last 30 days, reflecting analysts’ optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2023 earnings is pegged at $45.63 per share, indicating a 68.5% increase from the year-ago reported figure of 12.8% higher revenues of $14.1 billion. The consensus estimate for 2024 earnings is pegged at $53.02 per share, indicating a 16.2% increase from the year-ago reported figure on 7.6% higher revenues of $15.2 billion.
The expected long-term earnings growth rate is 30.3%, outperforming the industry average of 14.6%.
Growth Drivers
RE has been witnessing improving gross premium written over the last many years on the strength of its segments. While the Insurance segment benefits from new business growth, strong renewal retention and continued favorable rate increases strategic partnerships with core clients. The company’s position as a preferred reinsurance partner poises the Reinsurance segment well for growth.
Intensifying focus on having a mix of product lines with better rate adequacy and higher long-term margins bodes well for growth. A diversified income stream ensures profitability.
Everest Re boasts a strong capital position, banking on sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
Impressive Dividend History
Sustained solid operational excellence and a strong capital position aid Everest Re in enhancing shareholders’ value. RE has increased dividends at a nine-year CAGR (2014-2022) of 9.2% and targets a total shareholder return of more than 13% by 2023.
Upbeat Guidance
The insurer estimates gross written premium to witness a three-year CAGR of 10-15%. Segment wise, RE estimates gross written premium in the Insurance segment to grow at a three-year CAGR of 8-22%, while the same in the Reinsurance segment is expected to grow at a three-year CAGR of 8-12%.
Given prudent underwriting, RE aims for a low-90 combined ratio in 2023. Return on invested assets is projected between 2.75% and 3.25%, while the insurer targets a long-term debt-leverage ratio between 15% and 20%.
Value Score
It also has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, combined with a Zacks Rank #1 or #2 (Buy), offer better returns.
RenaissanceRe beat estimates in two of the last four quarters and missed in the other two. The Zacks Consensus Estimate for 2023 has moved 0.6% north in the past seven days.
The Zacks Consensus Estimate for RNR 2023 and 2024 earnings per share is pegged at $23.52 and $26.72, indicating year-over-year increases of 222.2% and 13.6%, respectively. In the past year, RNR has gained 1.4%.
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 2023 has moved 5.4% north in the past 60 days.
The Zacks Consensus Estimate for AXS 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increases of 29.6% and 11.7%, respectively. In the past year, AXS has gained 1.4%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 35.9%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating a year-over-year increase of 26.4% and 20.2%, respectively.
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Here's Why You Should Add Everest Re (RE) to Portfolio Now?
Everest Re Group’s new business growth, strong renewal retention, continued favorable rate increases, solid capital position and upbeat guidance make it worth adding to one’s portfolio.
RE has a solid history of delivering positive surprises in the last four reported quarters, the average being 18.41%.
This seventh-largest global property and casualty reinsurer has a VGM Score of B. The Style Score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth, and most promising momentum.
Zacks Rank & Price Performance
Everest Re currently sports a Zacks Rank #1 (Strong Buy). Year to date, the stock has gained 5% against the industry’s decline of 3.7%.
Return on Equity
Return on equity (ROE), a profitability measure to identify how efficiently a company is utilizing its shareholders’ funds, has been improving over the last several years. RE’s trailing 12-month ROE of 12.4% is better than the industry average of 6.5%.
Northbound Estimate Revisions
The Zacks Consensus estimate for 2023 and 2024 moved about 1% and 2.6% north in the last 30 days, reflecting analysts’ optimism.
Optimistic Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2023 earnings is pegged at $45.63 per share, indicating a 68.5% increase from the year-ago reported figure of 12.8% higher revenues of $14.1 billion. The consensus estimate for 2024 earnings is pegged at $53.02 per share, indicating a 16.2% increase from the year-ago reported figure on 7.6% higher revenues of $15.2 billion.
The expected long-term earnings growth rate is 30.3%, outperforming the industry average of 14.6%.
Growth Drivers
RE has been witnessing improving gross premium written over the last many years on the strength of its segments. While the Insurance segment benefits from new business growth, strong renewal retention and continued favorable rate increases strategic partnerships with core clients. The company’s position as a preferred reinsurance partner poises the Reinsurance segment well for growth.
Intensifying focus on having a mix of product lines with better rate adequacy and higher long-term margins bodes well for growth. A diversified income stream ensures profitability.
Everest Re boasts a strong capital position, banking on sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
Impressive Dividend History
Sustained solid operational excellence and a strong capital position aid Everest Re in enhancing shareholders’ value. RE has increased dividends at a nine-year CAGR (2014-2022) of 9.2% and targets a total shareholder return of more than 13% by 2023.
Upbeat Guidance
The insurer estimates gross written premium to witness a three-year CAGR of 10-15%. Segment wise, RE estimates gross written premium in the Insurance segment to grow at a three-year CAGR of 8-22%, while the same in the Reinsurance segment is expected to grow at a three-year CAGR of 8-12%.
Given prudent underwriting, RE aims for a low-90 combined ratio in 2023. Return on invested assets is projected between 2.75% and 3.25%, while the insurer targets a long-term debt-leverage ratio between 15% and 20%.
Value Score
It also has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, combined with a Zacks Rank #1 or #2 (Buy), offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are RenaissanceRe (RNR - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) ,
and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RenaissanceRe beat estimates in two of the last four quarters and missed in the other two. The Zacks Consensus Estimate for 2023 has moved 0.6% north in the past seven days.
The Zacks Consensus Estimate for RNR 2023 and 2024 earnings per share is pegged at $23.52 and $26.72, indicating year-over-year increases of 222.2% and 13.6%, respectively. In the past year, RNR has gained 1.4%.
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 2023 has moved 5.4% north in the past 60 days.
The Zacks Consensus Estimate for AXS 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increases of 29.6% and 11.7%, respectively. In the past year, AXS has gained 1.4%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 35.9%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating a year-over-year increase of 26.4% and 20.2%, respectively.