Results: RLI Corp. Beat Earnings Expectations And Analysts Now Have New Forecasts

RLI Corp. (NYSE:RLI) defied analyst predictions to release its quarterly results, which were ahead of market expectations. RLI delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$445m-13% above indicated-andUS$2.77-84% above forecasts- respectively This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for RLI

Taking into account the latest results, the current consensus from RLI's seven analysts is for revenues of US$1.69b in 2024. This would reflect a satisfactory 6.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 3.9% to US$7.02 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.63b and earnings per share (EPS) of US$5.23 in 2024. So it seems there's been a definite increase in optimism about RLI's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$167, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values RLI at US$175 per share, while the most bearish prices it at US$155. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that RLI's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.5% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% annually. So it's pretty clear that, while RLI's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around RLI's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$167, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for RLI going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for RLI (1 doesn't sit too well with us!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.