Arch Capital Reports Mixed Earnings Amidst Market Challenges

Pembroke, Bermuda-based Arch Capital Group Ltd. (ACGL) specializes in insurance, reinsurance, and mortgage insurance products both in the United States and globally. With a market capitalization of $34 billion, the company operates through key segments: Insurance, Reinsurance, Mortgage, and Corporate.

Recent Performance and Market Comparison

Over the past year, ACGL has underperformed compared to the broader market; however, it has shown some recovery in 2025. Specifically, ACGL’s stock price has declined 4.4% over the last 52 weeks but has gained 1.3% year-to-date. In comparison, the S&P 500 Index ($SPX) saw an 11.5% increase over the same period, with only a slight rise in 2025.

Focusing on industry performance, ACGL has not matched the iShares U.S. Insurance ETF’s (IAK) 17.8% increase over the past year, nor its 7.2% gain year-to-date.

Q1 Earnings Overview

Following the release of its mixed Q1 earnings on April 29, ACGL shares dropped 1.9%. The company reported total revenues of $4.7 billion, reflecting an 18.6% year-over-year increase. Despite this growth, it failed to meet Wall Street’s revenue estimates. The net cash from operating activities fell 6.8% year-over-year to $1.5 billion, indicating operational struggles. Additionally, adjusted net income decreased by 37.4% from the previous year to $587 million, while adjusted EPS also fell 37.1% to $1.54.

Future Expectations

For the fiscal year ending in December, analysts forecast a 14.9% year-over-year decrease in adjusted EPS to $7.90. However, it is worth noting that ACGL has a strong history of beating earnings expectations, surpassing consensus estimates in each of the past four quarters. Its Q1 adjusted EPS of $1.54 exceeded projections by 12.4%.

Analyst Ratings and Price Targets

Currently, ACGL holds a consensus “Moderate Buy” rating. Among the 17 analysts covering the stock, there are 10 “Strong Buys,” two “Moderate Buys,” four “Holds,” and one “Strong Sell.” This configuration has remained stable in recent months.

On May 6, Meyer Shields, an analyst from Keefe, Bruyette & Woods, maintained an “Outperform” rating on Arch Capital and raised the price target from $104 to $113.

As of now, ACGL’s average price target is $110.81, implying an 18.5% premium to its current levels. The highest target among analysts sits at $125, suggesting a potential upside of 33.6%.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.