Advertisement
Canada markets close in 1 hour 35 minutes
  • S&P/TSX

    21,604.97
    +17.09 (+0.08%)
     
  • S&P 500

    5,479.58
    +6.35 (+0.12%)
     
  • DOW

    38,776.05
    -2.05 (-0.01%)
     
  • CAD/USD

    0.7288
    -0.0001 (-0.01%)
     
  • CRUDE OIL

    81.36
    +1.03 (+1.28%)
     
  • Bitcoin CAD

    88,799.20
    -3,134.19 (-3.41%)
     
  • CMC Crypto 200

    1,320.50
    -68.90 (-4.96%)
     
  • GOLD FUTURES

    2,342.90
    +13.90 (+0.60%)
     
  • RUSSELL 2000

    2,029.59
    +7.59 (+0.38%)
     
  • 10-Yr Bond

    4.2270
    -0.0520 (-1.22%)
     
  • NASDAQ

    17,847.71
    -9.31 (-0.05%)
     
  • VOLATILITY

    12.57
    -0.18 (-1.41%)
     
  • FTSE

    8,191.29
    +49.14 (+0.60%)
     
  • NIKKEI 225

    38,482.11
    +379.67 (+1.00%)
     
  • CAD/EUR

    0.6785
    -0.0002 (-0.03%)
     

Will Everest Re's (RE) Beat Streak Continue in Q1 Earnings?

Everest Re Group, Ltd. RE is slated to report first-quarter 2023 earnings on May 1, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average being 18.41%.

Factors to Consider

Premium growth is likely to have been driven by an increase in the reinsurance business and insurance business.

The Insurance segment is likely to have benefited from balanced and diversified growth across most lines of business and geographies, new business and strong renewal retention.

The Reinsurance segment is likely to have benefited from growth in Casualty and Financial Lines, driven by an increase in core casualty clients. This is likely to have been offset by a combination of targeted reductions in property portfolio and foreign exchange movements.

The Zacks Consensus Estimate for premiums earned is pegged at $3.1 billion, indicating an increase of 11.9% from the year-ago reported figure. We expect net premiums earned to be $3.1 billion.

Net investment income is likely to have benefited from higher new money yields and an increasing reset in floating rate securities within the fixed income portfolio. The Zacks Consensus Estimate for net investment income is pegged at $262 million, indicating an increase of 7.8% from the year-ago reported figure. We expect net investment income to be $263.3 million.

Higher net written premiums and net investment income are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $3.4 billion, indicating an 11.4% increase from the year-ago reported figure. We expect revenues to be $3.2 billion.

Higher-than-expected cat losses are likely to have weighed on underwriting profitability and thus combined ratio.

The rate increase, exposure growth, prudent underwriting and traditional risk management capabilities are likely to have favored the combined ratio in the to-be-reported quarter. The consensus estimate for the combined ratio is pegged at 91, indicating an improvement of 100 basis points from the year-ago reported number. We expect the combined ratio to be 93 for the to-be-reported quarter.

The consensus estimate for the Reinsurance segment combined ratio is pegged at 90. The consensus estimate for the Insurance segment combined ratio is pegged at 94.

The Zacks Consensus Estimate for Everest Re’s first-quarter earnings is currently pegged at $12.01, indicating an increase of 16.4% from the year-ago quarter’s reported figure. We expect the bottom line to be $7.02 per share for the to-be-reported quarter.

What the Zacks Model Says

Our proven model predicts an earnings beat for RE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Everest Re has an Earnings ESP of +3.43%. This is because the Most Accurate Estimate of $12.42 is pegged higher than the Zacks Consensus Estimate of $12.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. Price and EPS Surprise
Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. price-eps-surprise | Everest Re Group, Ltd. Quote

ADVERTISEMENT

Zacks Rank: Everest Re carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Some other insurance stocks with the right combination of elements to deliver an earnings beat this time around are:

RenaissanceRe Holdings Ltd. RNR has an Earnings ESP of +3.37% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $7.34, indicating an increase of 109.7% from the year-ago reported figure.

RNR’s earnings beat estimates in two of the last four quarters and missed in the other two.

CNO Financial Group, Inc. CNO has an Earnings ESP of +5.65% and a Zacks Rank of 1 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 62 cents, indicating an increase of 47.6% from the year-ago reported figure.

CNO’s earnings beat estimates in three of the last four quarters and missed in one.

ProAssurance Corporation PRA has an Earnings ESP of +41.89% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 15 cents, indicating an increase of 7.1% from the year-ago reported figure.

PRA’s earnings beat estimates in two of the last four quarters and missed in the other two.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report

RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report

Everest Re Group, Ltd. (RE) : Free Stock Analysis Report

ProAssurance Corporation (PRA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research