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Everest Re (RE) to Report Q2 Earnings: Is a Beat in Store?

Zacks Equity Research

Everest Re Group, Ltd. RE is slated to report second-quarter 2019 results on Jul 29 after market close. The company delivered positive surprise in three of the last four reported quarters.

Factors to Consider

Everest Re’s second-quarter results are likely to benefit from its global presence, product diversification, capital adequacy, financial flexibility and traditional risk management capabilities.

The Insurance segment is likely to benefit from product diversification, staffing up of underwriting operations, international insurance growth and ramp up of Canadian and European platforms. The Lloyds platform should also add to the upside. The Zacks Consensus Estimate for premiums earned is pegged at $462 million.

The Reinsurance segment is likely to benefit from growth initiatives including deployment of increased capacity to pro-rata deal, which has attractive original pricing terms and conditions.

Better pricing at property and commercial auto books as well as primary general liability and various professional lines should aid premium. However, in U.S. workers' compensation, rate pressure persists.

Improved rate environment and higher asset base is likely to aid net investment income.  The company expects improvement in limited partnership income, given improvement in public equity market trading conditions.

A benign catastrophe environment is likely to aid underwriting profitability. The Zacks Consensus Estimate for combined ratio is pegged at 92%, indicating an improvement of 1300 basis points from the year-ago period reported figure.

The Zacks Consensus Estimate is pegged at $6.66 per share, indicating 579.6% year-over-year increase.

What Our Quantitative Model Says

Our proven model shows that Everest Re is likely to beat estimates in the to-be-reported quarter. This is because it has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Everest Re has an Earnings ESP of +0.53% as the Most Accurate Estimate of $6.70 is more than the Zacks Consensus Estimate of $6.66. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. Price and EPS Surprise
Everest Re Group, Ltd. Price and EPS Surprise

Everest Re Group, Ltd. price-eps-surprise | Everest Re Group, Ltd. Quote

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Zacks Rank: Everest Re carries a Zacks Rank #2.

Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks from the insurance industry with the right combination of elements to surpass estimates this time around are as follows:

Markel Corporation MKL is set to report second-quarter earnings on Jul 30. The company has an Earnings ESP of +1.60% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hartford Financial Services Group, Inc. HIG has an Earnings ESP of +0.63% and a Zacks Rank of 3. The company is scheduled to release second-quarter earnings on Aug 1.

Alleghany Corporation Y has an Earnings ESP of +1.74% and a Zacks Rank of 3. The company is scheduled to release second-quarter earnings on Aug 6.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report
 
Alleghany Corporation (Y) : Free Stock Analysis Report
 
Markel Corporation (MKL) : Free Stock Analysis Report
 
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
 
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