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Endurance Specialty: A Strong Buy

Zacks Equity Research

On Jan 14, Zacks Investment Research upgraded Endurance Specialty Holdings Ltd. (NYSE:ENH) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3 (Hold).

Why the Upgrade?

Endurance Specialty has been riding on a strong growth momentum ahead of its fourth-quarter and full-year 2013 results, which is slated to release after the closing bell on Feb 6, 2014. The growth impetus stems from improved core fundamentals in 2013, streamlining of the product portfolio and improvement in underwriting efficiencies.

Alongside, favorable market trends should help mitigate risks on investment returns. The company’s recent strategic alliances to strengthen its catastrophe risk management and reserves, primarily in the emerging markets of the Asia-Pacific further boosts its growth prospects. Moreover, strong expense management and incremental return of capital are deemed impressive by the investors and ratings agencies.

Endurance Specialty also outperformed the year-to-date S&P 500, which posted an increase of 25.6% against a return of 29.3% clocked by the company. Additionally, this global property and casualty (P&C) insurer and reinsurer delivered positive earnings surprise of 70.3% during the reported quarter.

On Nov 4, Endurance Specialty reported third-quarter 2013 operating earnings per share of $1.70, which outpaced both the Zacks Consensus Estimate of $1.11 and the year-ago quarter number of 74 cents.

Endurance Specialty has been experiencing rising earnings estimates following its robust third-quarter 2013 results. The Zacks Consensus Estimate for 2013 moved north by 5.8% to $6.60 per share in the last 60 days. The estimate for fourth-quarter 2013, in particular, shot up 8.5% to $1.54 a share.

Moreover, the estimate for 2014 rose 0.6% to $4.89 over the same period. Furthermore, no downward revision in estimates was witnessed for both the years.

Other Stocks to Consider

Apart from Endurance Specialty, other equally-ranked insurers in the industry include PartnerRe Ltd. (NYSE:PRE), Aspen Insurance Holdings Ltd. (NYSE:AHL) and White Mountains Insurance Group (NYSE:WTM). All these stocks carry the same Zacks Rank as Endurance Specialty.

Read the Full Research Report on ENH
Read the Full Research Report on PRE
Read the Full Research Report on WTM
Read the Full Research Report on AHL

Zacks Investment Research