On Apr 4, 2013, Zacks Investment Research upgraded
Everest Re Group Ltd.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Everest Re has been experiencing rising earnings estimates on
the back of improved fourth-quarter 2012 results. Moreover, the
company swung to profit in 2012, paving the way for a brighter
outlook for 2013. Additionally, this property-casualty insurer
delivered positive earnings surprises in all of the last 4
quarters with an average beat of 55.2%.
On Feb 6, Everest Re reported fourth-quarter 2012 operating
earnings of 80 cents per share, which exceeded the Zacks
Consensus Estimate of 50 cents and operating loss of 94 cents per
share in the year-ago quarter. The results were supported by the
Heartland acquisition along with higher premiums written in both
Insurance and Reinsurance segments.
Overall, a 4% rise in gross premiums and 16% growth in net
investment income blended well with a 7% decline in claims and
expenses. These factors also improved the combined ratio and book
value per share.
Favorable reinsurance market pricing raises optimism, while
initiatives to aggressively expand in the international markets
are likely to contribute significantly to the overall top line.
Moreover, Everest Re's conservative financial leverage enables
financial flexibility and efficient capital deployment, thereby
boosting shareholder value by 12% in 2012 and retaining
confidence in the stock.
Based on Everest Re's fundamental strength and claims
management, the Zacks Consensus Estimate for 2013 rose 3.8% to
$14.05 per share in the last 60 days, based on 7 upward estimate
revisions. The estimate for 2014 is pegged at $15.09, up 2.9% in
the last 60 days, based on 4 upward estimate revisions.
Meanwhile, no downward revision in estimates was witnessed for
both the years.
Other Stocks to Consider
Apart from Everest Re, other stocks that are outperforming in
the insurance sector include
Hilltop Holdings Inc.
XL Group Plc
). All these stocks carry a Zacks Rank #1 (Strong Buy).
HILLTOP HLDGS (HTH): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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