Shares of Everest Group, Ltd. (EG) have seen a rise of 10.1% since the beginning of the year, outperforming the industry’s decline of 7.8%. The Finance sector has also experienced a 6.5% increase during this time. With a market capitalization of $15.8 billion, the average trading volume of EG shares in the last three months was 0.3 million.
The company’s strong performance in new business growth, high renewal retention, consistent rate increases, and a solid capital position contribute to its success as a Zacks Rank #3 (Hold) insurer.
Everest Group has achieved earnings growth of 16.6% over the past five years, surpassing the industry average of 5.9%. It has consistently beaten earnings estimates in three of the last four quarters, with an average beat of 17.36%.
The company’s return on equity (ROE) has shown improvement over the years. With a trailing 12-month ROE of 14.9%, EG performs better than the industry average of 10.8%.
Everest Group aims to achieve a total shareholders return of more than 13% by 2023.
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Will the Upward Trend Continue?
The Zacks Consensus Estimate for Everest Group’s 2023 earnings stands at $46.79 per share, representing a 72.8% increase from the previous year’s figure. Additionally, revenue is projected to increase by 18% to reach $14.8 billion. The consensus estimate for 2024 earnings is $58.08 per share, indicating a 24% increase from the previous year with revenues predicted to be $16.7 billion, a 13.38% growth. The expected long-term earnings growth rate is 30.5%, outperforming the industry average of 12.1%. The company has a Growth Score of B.
Everest Group focuses on maintaining a diverse portfolio of product lines with favorable rate adequacy and high long-term margins, ensuring profitability. As the fourth-largest global property and casualty reinsurer, the company is well-positioned to capitalize on market opportunities and minimize volatility. It has expanded its primary insurance presence in Asia, Latin America, and Europe and expects a three-year compound annual growth rate (CAGR) of 10-15% in gross written premium.
The Insurance segment is expected to benefit from new business growth, strong renewal retention, and continued favorable rate increases, with an estimated three-year CAGR of 18-22% in gross written premium. The Reinsurance segment is well-poised for growth with strategic partnerships and its position as a preferred reinsurance partner, projecting a three-year CAGR of 8-12% in gross written premium.
With prudent underwriting practices, Everest Group aims for a combined ratio in the low-90s by 2023.
The company has a strong capital position, allowing for organic growth and strategic acquisitions. It also prioritizes returning value to shareholders through share buybacks and dividends.
Everest Group has a VGM Score of B, indicating attractive value, growth, and momentum.
Other promising stocks in the same industry include Old Republic International (ORI), Radian Group (RDN), and Corebridge Financial, Inc. (CRBG).
Old Republic International has consistently surpassed earnings expectations, with an average beat of 29.85% in the last four quarters. The stock has gained 13.6% year-to-date and holds a Zacks Rank #1 (Strong Buy).
Radian Group has reported a trailing four-quarter average earnings surprise of 30.88%. The stock has gained 42.8% year-to-date and carries a Zacks Rank #2 (Buy).
Corebridge Financial has consistently beaten earnings estimates, with an average beat of 14.34% in the last four quarters. The stock has seen a 10% loss year-to-date.
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