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Arch Capital Group Ltd. (ACGL)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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38.53-0.18 (-0.46%)
At close: 4:00PM EDT
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  • W
    William
    Sleeper stock set to rise:
    Arch: Upgrading To Buy On Improved MI Outlook + Hard(ening) P/C Market. Valuation Attractive At 110% of TBV. Raising Q2-20E & ‘20E By $0.30/sh And ‘21E By $0.15/sh.

    We are upgrading Arch Capital (ACGL, $28.29, Buy) to Buy from Neutral. There are 3 significant contributing factors we believe support a buy rating at this time: (1) The near term MI outlook now appears materially better than we had forecasted / mgmt. suggested in Q1 (guided to essentially no u/wing income over the last 3 quarters) and the reasonable “worst case” remains manageable given the capital position / significant reinsurance support. (2) While COVID-19 will be a nearer term drag on reported P/C results (we’re modeling ~$260M from here through 2021, including $60M in Q2), we believe the hard(ening) (re)insurance market “has legs” and presents an attractive opportunity for Arch. (3) Arch is a well-managed / premiere franchise with a strong balance sheet (recent $1B debt offering provides additional cushion) and a compelling valuation. Shares are down 34% YTD (vs. the S&P at -2%, multi-line (re)insurance peers at -27% and monoline MI’s at -47%) and are down 21% from the early June “bounce.” The stock currently trades at only a modest premium to TBV = 110% of Q2E TBV (115% with bonds at cost) with the current price suggesting a 2021E operating earnings yield of 9%. With our revised / improved outlook, we are raising our Q2-20E & 2020E by $0.30/sh each to $0.15/sh and $1.15/sh, respectively. We are also raising our 2021E by $0.15/sh to $2.50/sh. Additionally, we are initiating a $3.40/sh 2022E which contemplates further normalization in MI results and continued improvement for P/C as rate increases earn through.
  • D
    DJ
    stock split 6-25.
  • r
    rocco
    Pristine balance sheet..I always look at short assets compared to short term debt and they appear to have almost double ...as compared to metlife that appears to have an equal amount..net tangible assets appear to be almost 7 billion..again excellent
  • Y
    Yahoo Finance Insights
    Arch Capital reached a 52 Week low at 30.37
  • r
    rocco
    would have never split 3 for one if earnings were not going to be exceptional...
  • Y
    Yahoo Finance Insights
    Arch Capital reached a 52 Week low at 21.77
  • Y
    Yahoo Finance Insights
    Arch Capital reached a 52 Week low at 22.18
  • Y
    Yahoo Finance Insights
    Arch Capital reached a 52 Week low at 29.59
  • Y
    Yahoo Finance Insights
    ACGLO is up 45.45% to 24.00
  • Y
    Yahoo Finance Insights
    ACGL is down -66.21% to 27.39
  • Y
    Yahoo Finance Insights
    ACGLP reached a new 52 Week Low at $20.80
  • Y
    Yahoo Finance Insights
    ACGLP reached a new 52 Week Low at $21.50
  • Y
    Yahoo Finance Insights
    ACGLO reached a new 52 Week Low at $21.48
  • Y
    Yahoo Finance Insights
    ACGLO reached a new 52 Week Low at $22.76
  • Y
    Yahoo Finance Insights
    ACGLO reached a new 52 Week Low at $22.03
  • Y
    Yahoo Finance Insights
    ACGLO reached a new 52 Week Low at $23.15
  • Y
    Yahoo Finance Insights
    ACGLO reached a 52 Week low at $19.93
  • Y
    Yahoo Finance Insights
    ACGL reached a 52 Week low at $25.26
  • Y
    Yahoo Finance Insights
    ACGL reached a new 52 Week Low at 27.39
  • Y
    Yahoo Finance Insights
    ACGLP reached a 52 Week low at $20.32