We are reiterating our Outperform recommendation on the shares
Everest Re Group Ltd.
), following the solid second quarter earnings results, which
included a 20% positive earnings surprise. Over the past four
quarters, this company has delivered a positive surprise with an
average beat of 60%. Everest Re carries a Zacks Rank #1 (Strong
On Jul 23, Everest Re reported second-quarter operating
earnings of $5.10 per share, substantially beating the Zacks
Consensus Estimate of $4.26 per share. Earnings were also up 20%
year over year. The earnings increase came on the back of higher
premium which was up in both its business segments.
Everest Re has been witnessing rising earnings estimates. Over
the last 60 days, the Zacks Consensus Estimate for 2013 moved up
by 7.1% to $18.2 as 8 of the 9 estimates moved north. The same
for 2014 rose 4.3% to $17.30 as 7 of 9 estimates were raised over
the same time frame. The expected long term earnings growth is
Everest Re boasts of a superior risk-adjusted capital
position, long-term track record of generating favorable
earnings, experienced management team and market profile as a
leading global provider of insurance and reinsurance
Everest Re is witnessing improving rates in its reinsurance
and insurance lines of businesses.
The company has also derived top-line growth in the past few
years from its overseas business and the trend is expected to
continue in the future.
Everest Re's 10-year average combined ratio has remained below
the breakeven levels which signify its underwriting
However, exposure to cat losses and low interest rate
environment are some of the headwinds.
Other Stocks to Consider
Besides Everest Re,
Global Indemnity plc
State Auto Financial Corp.
) carrying Zacks Rank #1 (Strong Buy), look impressive.
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
STATE AUTO FINL (STFC): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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