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Everest Group (EG) Up 6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Everest Group (EG - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Everest Group due for a pullback? 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 Group Q1 Earnings Surpass, Revenues Rise Y/Y
Everest Group, Ltd.’s first-quarter 2024 operating income of $16.32 per share beat the Zacks Consensus Estimate by 2.1%. The bottom line jumped 44.3% year over year. Everest Group witnessed higher premiums across its reinsurance and insurance businesses, improved net investment income and record underwriting income. Higher expenses partially offset the upside.
Operational Update
Everest Group’s total operating revenues of $4.14 billion climbed 26% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 1.4%. Gross written premiums improved 17.2% year over year to $4.4 billion, driven by 20.4% growth in Reinsurance and a rise of 9.8% in Insurance. Our estimate was $4.3 billion.
Net investment income was $457 million, which surged 75.7% year over year. The upside was driven by a larger asset base and strong core fixed income returns. Our estimate was $410.3 million. The Zacks Consensus Estimate was pegged at $436 million. Total claims and expenses rose 14.7% to $3.3 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. The figure matched our estimate.
Pre-tax underwriting income was $409 million, which soared 50% year over year. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $85 million, narrower than the loss of $110 million in the year-ago quarter. The loss was due to the Francis Scott Key Bridge Collapse in Baltimore.
The combined ratio improved 240 basis points (bps) year over year to 88.8 in the reported quarter. The figure matched the Zacks Consensus Estimate, while our estimate was 85.5.
Segment Update
The Reinsurance segment’s gross written premiums were $3.2 billion, up 21% year over year. Growth was broad-based across geographies and lines as the flight to quality continues to accelerate globally. The combined ratio of the Reinsurance segment improved 350 bps to 87.3. It matched the Zacks Consensus Estimate. Our estimate was 84.9.
The Insurance segment generated gross written premiums of $1.2 billion, up 10% year over year, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines. The combined ratio deteriorated 80 bps to 93.1 for the Insurance segment. Our estimate was 87.2. The Zacks Consensus Estimate was pinned at 91.
Financial Update
Everest Group exited the first quarter of 2024 with total investments and cash of $38.1 billion, up 2.7% from the 2023-end level. Shareholder equity at the end of the reported quarter increased 3.2% from the figure at the end of 2023 to $13.6 billion.
Book value per share was $313.55 as of Mar 31, 2024, up 3% from the 2023-end level. The annualized net income return on equity was 20.6%, which expanded 640 bps from the year-ago quarter.
Everest Group’s cash flow from operations was $1.1 billion in the quarter, up 3.5% year over year. The company paid common share dividends of $76 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Everest Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Everest Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Everest Group belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG - Free Report) , has gained 3.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
The Hartford reported revenues of $4.34 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.34 for the same period compares with $1.68 a year ago.
The Hartford is expected to post earnings of $2.36 per share for the current quarter, representing a year-over-year change of +25.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.7%.
The Hartford has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Everest Group (EG) Up 6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Everest Group (EG - Free Report) . Shares have added about 6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Everest Group due for a pullback? 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 Group Q1 Earnings Surpass, Revenues Rise Y/Y
Everest Group, Ltd.’s first-quarter 2024 operating income of $16.32 per share beat the Zacks Consensus Estimate by 2.1%. The bottom line jumped 44.3% year over year. Everest Group witnessed higher premiums across its reinsurance and insurance businesses, improved net investment income and record underwriting income. Higher expenses partially offset the upside.
Operational Update
Everest Group’s total operating revenues of $4.14 billion climbed 26% year over year on higher premiums earned and net investment income. The top line missed the consensus mark by 1.4%. Gross written premiums improved 17.2% year over year to $4.4 billion, driven by 20.4% growth in Reinsurance and a rise of 9.8% in Insurance. Our estimate was $4.3 billion.
Net investment income was $457 million, which surged 75.7% year over year. The upside was driven by a larger asset base and strong core fixed income returns. Our estimate was $410.3 million. The Zacks Consensus Estimate was pegged at $436 million. Total claims and expenses rose 14.7% to $3.3 billion, primarily due to higher incurred losses and loss adjustment expenses, commission, brokerage, taxes and fees, other underwriting expenses, corporate expenses and interest, fees and bond issue cost amortization expense. The figure matched our estimate.
Pre-tax underwriting income was $409 million, which soared 50% year over year. Pre-tax catastrophe losses net of estimated recoveries and reinstatement premiums were $85 million, narrower than the loss of $110 million in the year-ago quarter. The loss was due to the Francis Scott Key Bridge Collapse in Baltimore.
The combined ratio improved 240 basis points (bps) year over year to 88.8 in the reported quarter. The figure matched the Zacks Consensus Estimate, while our estimate was 85.5.
Segment Update
The Reinsurance segment’s gross written premiums were $3.2 billion, up 21% year over year. Growth was broad-based across geographies and lines as the flight to quality continues to accelerate globally. The combined ratio of the Reinsurance segment improved 350 bps to 87.3. It matched the Zacks Consensus Estimate. Our estimate was 84.9.
The Insurance segment generated gross written premiums of $1.2 billion, up 10% year over year, driven by a diversified mix of property and specialty lines, partially offset by lower written premiums in monoline workers' compensation and financial lines. The combined ratio deteriorated 80 bps to 93.1 for the Insurance segment. Our estimate was 87.2. The Zacks Consensus Estimate was pinned at 91.
Financial Update
Everest Group exited the first quarter of 2024 with total investments and cash of $38.1 billion, up 2.7% from the 2023-end level. Shareholder equity at the end of the reported quarter increased 3.2% from the figure at the end of 2023 to $13.6 billion.
Book value per share was $313.55 as of Mar 31, 2024, up 3% from the 2023-end level. The annualized net income return on equity was 20.6%, which expanded 640 bps from the year-ago quarter.
Everest Group’s cash flow from operations was $1.1 billion in the quarter, up 3.5% year over year. The company paid common share dividends of $76 million during the quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Everest Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Everest Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Everest Group belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, The Hartford (HIG - Free Report) , has gained 3.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
The Hartford reported revenues of $4.34 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.34 for the same period compares with $1.68 a year ago.
The Hartford is expected to post earnings of $2.36 per share for the current quarter, representing a year-over-year change of +25.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.7%.
The Hartford has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.