Will Arch Capital's (ACGL) Beat Streak Continue in Q3 Earnings?
Arch Capital Group Ltd. ACGL is slated to report third-quarter 2023 earnings on Oct 30, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average beat being 26.83%.
Factors to Consider
Premiums in the third quarter are expected to have benefited from a rise in most lines of business due to new business opportunities, growth in existing accounts and rate increases in the Insurance and Reinsurance segments.
The Zacks Consensus Estimate for net premiums earned is pegged at $3.1 billion, indicating an increase of 25.7% from the year-ago reported figure. We expect net premiums earned to increase 15.2% to $2.8 billion.
Net investment income is likely to have benefited from higher yields available in the financial market in the to-be-reported quarter. We expect net investment income to increase 106.2% to $265.3 million.
The Zacks Consensus Estimate for investment income is pegged at $261 million, indicating a 102.3% increase from the year-ago reported figure.
The top line is likely to have benefited from improved earned premiums and higher net investment income. The Zacks Consensus Estimate for revenues is pegged at $3.37 billion, indicating an increase of 30.3% from the year-ago reported figure.
Expenses are expected to have increased on higher losses and loss adjustment expenses, acquisition costs and other operating expenses. We expect total expenses to increase 13.9% to $2.7 billion.
ACGL is expected to have gained from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for the combined ratio is pegged at 87, indicating an improvement of 1000 basis points from the year-ago reported figure.
The Zacks Consensus Estimate for third-quarter 2023 earnings of $1.48 per share indicates an increase of 428.5% from the year-ago quarter’s reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Arch Capital has an Earnings ESP of +1.37%. This is because the Most Accurate Estimate of $1.50 is pegged higher than the Zacks Consensus Estimate of $1.48. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
Zacks Rank: ACGL currently carries a Zacks Rank #2.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
American Financial Group, Inc. AFG has an Earnings ESP of +0.41% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $2.47, indicating a year-over-year increase of 10.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AFG’s earnings beat estimates in three of the last four reported quarters and missed in one.
Enact Holdings, Inc. ACT has an Earnings ESP of +2.33% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at 86 cents, indicating a year-over-year decline of 26.5%.
ACT’s earnings beat estimates in three of the last four quarters and missed in the other one.
American International Group, Inc. AIG has an Earnings ESP of +4.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.55, indicating a year-over-year increase of 134.8%.
AIG’s earnings beat estimates in each of the last four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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American International Group, Inc. (AIG) : Free Stock Analysis Report
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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Enact Holdings, Inc. (ACT) : Free Stock Analysis Report
