Yahoo Finance Here's What Analysts Are Forecasting For Reinsurance Group of America, Incorporated After Its Annual Results
Last week, you might have seen that Reinsurance Group of America, Incorporated (NYSE:RGA) released its annual result to the market. The early response was not positive, with shares down 5.4% to US$147 in the past week. Reinsurance Group of America reported in line with analyst predictions, delivering revenues of US$14b and statutory earnings per share of US$13.62, suggesting the business is executing well and in line with its plan. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for Reinsurance Group of America
Taking into account the latest results, the current consensus from Reinsurance Group of America's five analysts is for revenues of US$14.8b in 2020, which would reflect a credible 3.8% increase on its sales over the past 12 months. Statutory earnings per share are forecast to reduce 5.1% to US$13.17 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$14.6b and earnings per share (EPS) of US$13.11 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$165. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Reinsurance Group of America at US$183 per share, while the most bearish prices it at US$144. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that analysts expect Reinsurance Group of America's revenue growth will slow down substantially, with revenues next year expected to grow 3.8%, compared to a historical growth rate of 6.3% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.0% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkReinsurance Group of America will grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Reinsurance Group of America analysts - going out to 2022, and you can see them free on our platform here.
It might also be worth considering whether Reinsurance Group of America's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
