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Why Is Markel (MKL) Up 3.7% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Markel Corporation (MKL - Free Report) . Shares have added about 3.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Markel Earnings and Revenues Beat Estimates in Q4
Markel reported fourth-quarter 2016 net income of $9.11 per share, which beat the Zacks Consensus Estimate of $4.92 by 85%. Earnings, however, declined 36% year over year.
The insurer benefited from strong performance across all segments. While underwriting results were strong, favorable movements in the equity markets drove better investment results.
Operational Update
Total operating revenue of $1.4 billion came in ahead of the Zacks Consensus Estimate of $1.1 billion. Moreover, the top line improved 0.6% year over year on higher premiums, investment income as well as other revenues.
Total operating expenses of Markel increased 9% year over year to $1.2 billion.
Markel’s combined ratio deteriorated 100 basis points (bps) year over year to 89% in the reported quarter.
Segment Update
U.S. Insurance – Net written premiums were up 4.4% year over year to $543 million in the reported quarter.
Operating income was $17 million, down 17% year over year.
Combined ratio deteriorated 100 bps year over year to 88% in the quarter.
International Insurance − Net written premiums declined 2% year over year to $184 million.
Operating income plunged 54% to $17 million in the quarter.
Combined ratio deteriorated 900 bps year over year to 92% in the quarter.
Reinsurance Segment – Net written premiums increased 27% year over year to $112 million.
Operating income of $26.7 million decreased 16% year over year.
Combined ratio deteriorated 400 bps year over year to 94% in the quarter.
Other Insurance (Discontinued Lines) Segment - Net written premiums of $0.08 million were lower than $0.7 million in the year-ago quarter.
Operating loss of $7.6 million was substantially narrower than the year-ago quarter loss of $35.3 million.
Financial Updates
Markel exited 2016 with total cash, cash equivalents and investments of $19.1 billion compared with $18.1 billion at year-end 2015.
Book value per share increased 8% from year-end 2015 to $ $606.30 as of Dec 31, 2016.
Net cash from operating activities inched up 0.2% year over year to $534.6 million in 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Markel's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is Markel (MKL) Up 3.7% Since the Last Earnings Report?
It has been about a month since the last earnings report for Markel Corporation (MKL - Free Report) . Shares have added about 3.7% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Markel Earnings and Revenues Beat Estimates in Q4
Markel reported fourth-quarter 2016 net income of $9.11 per share, which beat the Zacks Consensus Estimate of $4.92 by 85%. Earnings, however, declined 36% year over year.
The insurer benefited from strong performance across all segments. While underwriting results were strong, favorable movements in the equity markets drove better investment results.
Operational Update
Total operating revenue of $1.4 billion came in ahead of the Zacks Consensus Estimate of $1.1 billion. Moreover, the top line improved 0.6% year over year on higher premiums, investment income as well as other revenues.
Total operating expenses of Markel increased 9% year over year to $1.2 billion.
Markel’s combined ratio deteriorated 100 basis points (bps) year over year to 89% in the reported quarter.
Segment Update
U.S. Insurance – Net written premiums were up 4.4% year over year to $543 million in the reported quarter.
Operating income was $17 million, down 17% year over year.
Combined ratio deteriorated 100 bps year over year to 88% in the quarter.
International Insurance − Net written premiums declined 2% year over year to $184 million.
Operating income plunged 54% to $17 million in the quarter.
Combined ratio deteriorated 900 bps year over year to 92% in the quarter.
Reinsurance Segment – Net written premiums increased 27% year over year to $112 million.
Operating income of $26.7 million decreased 16% year over year.
Combined ratio deteriorated 400 bps year over year to 94% in the quarter.
Other Insurance (Discontinued Lines) Segment - Net written premiums of $0.08 million were lower than $0.7 million in the year-ago quarter.
Operating loss of $7.6 million was substantially narrower than the year-ago quarter loss of $35.3 million.
Financial Updates
Markel exited 2016 with total cash, cash equivalents and investments of $19.1 billion compared with $18.1 billion at year-end 2015.
Book value per share increased 8% from year-end 2015 to $ $606.30 as of Dec 31, 2016.
Net cash from operating activities inched up 0.2% year over year to $534.6 million in 2016.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Markel Corporation Price and Consensus
Markel Corporation Price and Consensus | Markel Corporation Quote
VGM Scores
At this time, Markel's stock has a poor Growth Score of 'F', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
The stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.