International Cat And Specialty Insurance Will Expand Horizons

Analysts have modestly raised their price target for Everest Group, citing a higher fair value estimate of $390.20, improved sector stability, and solid third-quarter trends. However, there remains ongoing cautiousness about profit margins and industry fundamentals.

Analyst Commentary

Recent Street research presents a nuanced picture for Everest Group, with both optimistic and cautious viewpoints emerging as price targets are revised and sector fundamentals weighed. Below is a summary of current analyst sentiment:

• Bullish analysts have raised their price targets multiple times in recent months. This highlights confidence in the company's execution and ability to derive value amid sector shifts.
• The third quarter was described as "relatively calm." The absence of major catastrophic events contributed to earnings stability and supported an improved fair value estimate.
• Fundamental improvements in some commercial lines, including a lighter mix of property renewals, are expected to help with pricing power and potentially shore up profitability.
• Underwriting results in the reinsurance business were reported as better than expected in recent quarters. This contributed positively to outlooks and justified upward price adjustments.

• Bearish analysts continue to express caution regarding the profitability of certain lines. They point out that fundamentals across the board remain uneven with weak margin outlooks for some segments.
• There is skepticism about declining property pricing. Some suggest that current pricing trends are irrational when set against rising loss averages.
• Analysts stress that the sector is in transition. Macro uncertainties and headwinds are likely to persist, pressuring valuation multiples and growth expectations.
• There is concern that for reinsurers, including Everest Group, the cost of capital may outpace returns by 2027. This could lead to long-term margin compression unless industry dynamics improve.

What's in the News

• Wells Fargo raised Everest Group's price target to $375 from $362 following its second-quarter report. The firm noted strong reinsurance results despite mixed performance in other segments (Wells Fargo).
• Everest Group repurchased 580,883 shares between April 1, 2025 and June 30, 2025 for $200 million, completing 65.14% of the buyback program announced in 2004 (Company Filing).

Valuation Changes

• Fair Value: The fair value estimate has risen slightly, moving from $386.33 to $390.20 per share.
• Discount Rate: This has decreased marginally from 6.82% to 6.78%, indicating a slightly lower risk premium applied in models.
• Revenue Growth: Revenue growth projections have softened further, shifting from -1.71% to -1.75% year-over-year.
• Net Profit Margin: The net profit margin estimate declined, going from 21.68% to 21.19%.
• Future P/E: The projected future price-to-earnings ratio has increased slightly from 4.91x to 5.07x.