Here's Why You Should Retain Everest Re (RE) in Your Portfolio
Everest Re Group, Ltd. RE has been gaining momentum on the back of new business growth, strong renewal retention, continued favorable rate increases and a solid capital position.
Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2023 earnings is pegged at $43.69 per share, indicating a 61.3% increase from the year-ago reported figure of 18% higher revenues of $14.78 billion. The consensus estimate for 2024 earnings is pegged at $55.34 per share, indicating a 26.6% increase from the year-ago reported figure on 13.7% higher revenues of $16.81 billion.
The expected long-term earnings growth rate is pegged at 29%, outperforming the industry average of 13.7%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 has moved 1.3% north in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Everest Re has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average beat being 10.09%.
Zacks Rank & Price Performance
Everest Re currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 29.3%, outperforming the industry’s rise of 20.9%.
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Style Score
Everest Re has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and most promising momentum.
Return on Equity (ROE)
Everest Re’s trailing 12-month ROE was 17.2%, up 100 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
Business Tailwinds
Everest Re’s gross premium written has been improving over the last many years on the strength of its segments. The insurer estimates gross written premium to witness a three-year CAGR of 10-15%.
Everest Re’s Insurance segment remains well-poised for growth on the back of new business growth, strong renewal retention, continued favorable rate increases and strategic partnerships with core clients. RE estimates gross written premium in the Insurance segment to grow at a three-year CAGR of 18-22%.
The insurer’s position as a preferred reinsurance partner poises the Reinsurance segment well for growth. RE estimates gross written premium in the Reinsurance segment to grow at a three-year CAGR of 8-12%.
The global property and casualty reinsurer has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Everest Re boasts a strong capital position, banking on sufficient cash generation capabilities and benefits from capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities.
Sustained solid operational excellence and a strong capital position aid Everest Re in enhancing shareholders’ value. RE has increased dividends at an eight-year CAGR (2015-2022) of 7.1% and targets a total shareholder return of more than 13% by 2023, reflecting robust and well-diversified earnings power.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. KNSL, RLI Corp. RLI and Root, Inc. ROOT. While Kinsale Capital and RLI Corp. sport a Zacks Rank #1 (Strong Buy), Root carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 66.6%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.62 and $12.89, indicating a year-over-year increase of 36.1% and 21.3%, respectively.
RLI Corp. beat estimates in each of the last four quarters, the average being 43.50%. In the past year, RLI has gained 20.9%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings has moved 3.6% and 10.9% north, respectively, in the past seven days.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 63.3%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.
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RLI Corp. (RLI) : Free Stock Analysis Report
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
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Root, Inc. (ROOT) : Free Stock Analysis Report
