On February 12, Zacks Investment Research upgraded
XL Group Plc
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
XL has been witnessing rising earnings estimates on the back
of strong fourth-quarter 2012 results and an enhanced optimism
for 2013. Moreover, this well-known insurance, reinsurance and
other financial services provider delivered positive earnings
surprises in all of the last four quarters with an average beat
of 54.3%. The long-term expected earnings growth rate for this
stock is 8.3%
Last week, XL reported fourth-quarter 2012 operating earnings
of 13 cents per share, which outpaced the Zacks Consensus
Estimate of a loss of 35 cents and a loss of 25 cents in the
year-ago quarter. Earnings were primarily escalated due to
top-line growth of 11.8% based on the company's conservative
underwriting practices and repositioned P&C portfolio. This
was coupled with a decline in operating expenses of 14.8% over
the prior-year quarter. Improved liquidity and operating leverage
have also helped XL to maintain consistencyt with its share
repurchase activities, reflecting an accretion in earnings per
share in the future.
The Zacks Consensus Estimate for 2013 increased 3.4% to $2.44
per share as most of the estimates were revised higher over the
last 7 days, while no downward revision was witnessed. Even for
2014, most of the estimates were revised upward over the same
time frame, lifting the Zacks Consensus Estimate by 6.1% to $2.79
Other Stocks to Consider
Other strong performers in the insurance sector include
White Mountain Insurance
First American Financial Corp.
), all of which carry a Zacks Rank #1 (Strong Buy).
FIRST AMER FINL (FAF): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
WHITE MTN INS (WTM): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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