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W. R. Berkley Stock Up 14% in 3 Months: Will the Rally Last?
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Shares of W. R. Berkley Corporation (WRB - Free Report) have gained 13.5% in the past three months, outperforming the industry’s increase of 11.9% and the Zacks S&P 500 composite’s rise of 0.1% in the same time frame. The Finance sector has declined 0.3% in the said time frame. With a market capitalization of $23 billion, the average volume of shares traded in the last three months was 1.7 million.
Shares of WRB closed at $59.38 on Monday, near its 52-week high of $61.28. WRB shares are trading well above the 50-day moving average, indicating a bullish trend.
WRB, one of the nation’s largest commercial lines property casualty insurance providers, currently carries a Zacks Rank #3 (Hold). A solid insurance business, momentum in international business and a sturdy financial position should continue to drive earnings. Earnings increased 24.3% in the last five years, better than the industry average of 10.5%.
W. R. Berkley has an impressive VGM Score of B. This style score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth and momentum.
WRB Outperforms Industry, Sector, S&P 500 in 3 Months
Image Source: Zacks Investment Research
Return on equity (ROE) for the trailing 12 months was 21.3%, comparing favorably with the industry’s 7.8%. This reflects its efficiency in utilizing shareholders’ funds. It envisions a long-term target of 15%.
Also, return on invested capital (ROIC) has been increasing over the last few quarters while the company raised its capital investment over the same time frame. This reflects WRB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.3%, better than the industry average of 6.1 %.
Can WRB Stock Retain the Momentum?
WRB primarily focuses on commercial lines, including excess and surplus lines, admitted lines and specialty personal lines. Its growth strategy encompasses operating in areas where it has a competitive advantage.
Several new startup units in varied business lines, expansion of international business that offers diversification benefits, rate increase, benefits derived from market dislocations and high retention should drive the Insurance business.
Premium growth in the international unit is mainly supported by the emerging markets of the United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia. The company remains focused on expanding selectively in attractive global markets.
W.R. Berkley maintains a solid balance sheet with sufficient liquidity and strong cash flows. Banking on prudent underwriting, it boasts more than 60 straight quarters of favorable reserve development.
Two of the six analysts covering the stock have raised estimates for 2024 and 2025 over the past 30 days. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 1% and 0.5% north, respectively, in the past 30 days, reflecting analyst optimism.
The Zacks Consensus Estimate for 2024 earnings is pegged at $4.03, suggesting an increase of 22.9% on 12.1% higher revenues of $13.6 billion. The consensus estimate for 2025 earnings is pegged at $4.26, suggesting an increase of 5.7% on 7.3% higher revenues of $14.6 billion.
The long-term earnings growth is expected to be 13.5%, better than the industry average of 11%. We expect the 2026 bottom line to witness a three-year CAGR of 12.8%.
W.R. Berkley has been hiking dividends since 2005, banking on a solid capital position. Its dividend yield of 0.5% appears attractive compared with the industry average of 0.3%, making it an attractive pick for yield-seeking investors.
Heritage Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 49.15%. In the past three months, HRTG has rallied 97.4%.
The Zacks Consensus Estimate for HRTG’s 2024 and 2025 earnings implies 10.3% and 18.1% year-over-year growth, respectively.
Mercury General’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 3,539%. In the past three months, MCY’s stock has surged 14%.
The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings indicates 1,233% and 50% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. In the past three months, PRA’s stock has lost 0.3%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings suggests 514.3% and 32.8% year-over-year growth, respectively.
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W. R. Berkley Stock Up 14% in 3 Months: Will the Rally Last?
Shares of W. R. Berkley Corporation (WRB - Free Report) have gained 13.5% in the past three months, outperforming the industry’s increase of 11.9% and the Zacks S&P 500 composite’s rise of 0.1% in the same time frame. The Finance sector has declined 0.3% in the said time frame. With a market capitalization of $23 billion, the average volume of shares traded in the last three months was 1.7 million.
Shares of WRB closed at $59.38 on Monday, near its 52-week high of $61.28. WRB shares are trading well above the 50-day moving average, indicating a bullish trend.
WRB, one of the nation’s largest commercial lines property casualty insurance providers, currently carries a Zacks Rank #3 (Hold). A solid insurance business, momentum in international business and a sturdy financial position should continue to drive earnings. Earnings increased 24.3% in the last five years, better than the industry average of 10.5%.
W. R. Berkley has an impressive VGM Score of B. This style score rates stocks on their combined weighted styles, helping to identify those with the most attractive value, best growth and momentum.
WRB Outperforms Industry, Sector, S&P 500 in 3 Months
Image Source: Zacks Investment Research
Return on equity (ROE) for the trailing 12 months was 21.3%, comparing favorably with the industry’s 7.8%. This reflects its efficiency in utilizing shareholders’ funds. It envisions a long-term target of 15%.
Also, return on invested capital (ROIC) has been increasing over the last few quarters while the company raised its capital investment over the same time frame. This reflects WRB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.3%, better than the industry average of 6.1 %.
Can WRB Stock Retain the Momentum?
WRB primarily focuses on commercial lines, including excess and surplus lines, admitted lines and specialty personal lines. Its growth strategy encompasses operating in areas where it has a competitive advantage.
Several new startup units in varied business lines, expansion of international business that offers diversification benefits, rate increase, benefits derived from market dislocations and high retention should drive the Insurance business.
Premium growth in the international unit is mainly supported by the emerging markets of the United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia. The company remains focused on expanding selectively in attractive global markets.
W.R. Berkley maintains a solid balance sheet with sufficient liquidity and strong cash flows. Banking on prudent underwriting, it boasts more than 60 straight quarters of favorable reserve development.
Two of the six analysts covering the stock have raised estimates for 2024 and 2025 over the past 30 days. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 1% and 0.5% north, respectively, in the past 30 days, reflecting analyst optimism.
The Zacks Consensus Estimate for 2024 earnings is pegged at $4.03, suggesting an increase of 22.9% on 12.1% higher revenues of $13.6 billion. The consensus estimate for 2025 earnings is pegged at $4.26, suggesting an increase of 5.7% on 7.3% higher revenues of $14.6 billion.
The long-term earnings growth is expected to be 13.5%, better than the industry average of 11%. We expect the 2026 bottom line to witness a three-year CAGR of 12.8%.
W.R. Berkley has been hiking dividends since 2005, banking on a solid capital position. Its dividend yield of 0.5% appears attractive compared with the industry average of 0.3%, making it an attractive pick for yield-seeking investors.
Stocks to Consider
Some top-ranked stocks from the insurance industry are Heritage Insurance (HRTG - Free Report) , Mercury General (MCY - Free Report) and ProAssurance (PRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage Insurance’s earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 49.15%. In the past three months, HRTG has rallied 97.4%.
The Zacks Consensus Estimate for HRTG’s 2024 and 2025 earnings implies 10.3% and 18.1% year-over-year growth, respectively.
Mercury General’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 3,539%. In the past three months, MCY’s stock has surged 14%.
The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings indicates 1,233% and 50% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. In the past three months, PRA’s stock has lost 0.3%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings suggests 514.3% and 32.8% year-over-year growth, respectively.