On May 14, 2013, shares of
) hit a 52-week high of $92.69. The momentum was driven by a
strong first quarter, which included a 12.4% positive surprise,
rating upgrade and successful closure of the acquisition of ABA
ACE Limited reported first-quarter 2013 earnings on Apr 22. Net
operating earnings came in at $2.17, up 5.8% year over year.
Solid underwriting performances aided the better-than-expected
results. Both the U.S. and international business operations
experienced growth and better margins. ACE Limited also benefited
from improved commercial property & casualty pricing
Based on positive first-quarter prior period reserve development,
lower-than-planned catastrophe losses realized in the first
quarter and better-than-expected current accident year results
excluding catastrophe losses, ACE Limited raised the operating
earnings expectation to $7.10-$7.50 per share, up from
$6.60-$7.00 per share for 2013. The Zacks Consensus Estimate of
$8.10 is much above the company guided range.
With respect to earnings trend, ACE Limited delivered positive
earnings surprise in all the past 4 quarters with an average of
Recently, Fitch Ratings upgraded the ratings of ACE Limited and
its subsidiaries. While senior debt ratings were upgraded to 'A+'
from 'A', the Issuer Default Ratings (IDR) were revised higher to
'AA-' from 'A+', and the Insurer Financial Strength (IFS) ratings
to 'AA' from 'AA-'. Outlook was revised to Stable from Positive.
ACE Limited also closed the acquisition of the fourth largest
property and casualty (P&C) insurer in Mexico, ABA Seguros
from Ally Financial Inc. for $865 million.
Additionally, valuation for ACE Limited looks attractive. The
shares are trading at a discount to the peer group average both
on a price-to-book basis and on a forward price-to-earnings basis
with return on equity higher than the peer group average.
ACE Limited presently carries a Zacks Rank #2 (Buy). Property and
casualty insurers like
AXIS Capital Holdings Ltd
Montpelier Re Holdings Ltd
Hilltop Holdings Inc
), among others, carry a favorable Zacks Rank #1 (Strong Buy) and
ACE LIMITED (ACE): Free Stock Analysis Report
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