Everest Group Is Trading at a Discount: Time to Load Up or Hold Off?

Shares of Everest Group have lost 7.9% in the year-to-date period, underperforming its industry, the Finance sector and the Zacks S&P 500 composite's growth of 3.9%, 13.6% and 13.4%, respectively, in the same time frame. The insurer has a market capitalization of $13.9 billion. The average volume of shares traded in the last three months was 0.4 million. Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2025 revenues is pegged at $17.7 billion, implying a year-over-year improvement of 2.3%. The consensus estimate for Everest Group's current-year earnings is pegged at $45.51 per share, indicating 52.6% growth from the year-ago reported figure. The consensus estimate for 2026 earnings per share and revenues indicates year-over-year increases of 33.6% and 4.8%, respectively. The Zacks Consensus Estimate for 2025 earnings has moved up 0.3% in the past month, while the same for 2026 has moved down 0.5%. Image Source: Zacks Investment Research Based on short-term price targets offered by 16 analysts, the Zacks average price target is $382.63 per share. The average indicates a potential 15.7% upside from the last closing price. Image Source: Zacks Investment Research Everest Group is drawing strength from organic drivers like product diversification, healthier premium volumes and a balanced mix across insurance lines. These fundamentals, along with their widening reach in global markets, continue to support steady and sustainable growth. Building on this base, Everest Group is widening its presence in Asia, Latin America and Europe, reducing reliance on North America while tapping underpenetrated markets. Greater autonomy for local teams sharpens underwriting agility, and a premium base spread across more than 100 countries enhances diversification. Together with disciplined capital deployment, these moves strengthen risk-adjusted returns and add stability to long-term earnings. Complementing this geographic balance, Everest Group is also seeing steady gains from its investment portfolio. With more than three-fourths of assets placed in investment-grade fixed income and only minimal exposure to equities, the company maintains a conservative stance. This approach not only delivers reliable income but also positions the portfolio to benefit as the higher-rate environment continues to play out. Backing these strengths is a solid balance sheet. Everest Group's debt-to-capital ratio stands at just 19.3, comfortably below the industry average of 34.2. Its times interest earned ratio of 447x, compared with the industry's 11.5x, highlights ample financial flexibility and a disciplined approach to leverage. Despite its many strengths, Everest Group remains vulnerable to the unpredictable nature of catastrophic events. Losses from such occurrences were limited in the second quarter, yet the inherent exposure continues to weigh on earnings consistency. Active risk management measures soften the blow, but history shows that catastrophic losses have a recurring impact, and the second quarter's combined ratio still edged up 10 basis points year over year to 90.4. Profitability metrics also trail industry peers. Everest Group's return on equity was 5.9%, well below the sector average of 14.8%. This gap points to weaker capital efficiency and underscores the challenge of lifting overall returns to match the broader industry's performance. Everest Group underscores its focus on shareholder value through prudent capital management. Dividends have been raised four times over the past five years, translating into an annualized growth rate of 11.7%, with a current payout ratio of 40. In addition, the board has authorized a $10 million share repurchase program, further reflecting its commitment to rewarding investors. Overall, Everest Group is supported by product diversification, higher premium volumes and disciplined financial management. However, continued exposure to catastrophe losses and returns below industry averages highlights ongoing challenges in profitability and capital efficiency. Given the bearish analyst sentiments and unfavorable ROE, it is therefore wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Prudential Financial, Inc. (PRU) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com).

Everest Group Is Trading at a Discount: Time to Load Up or Hold Off?

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