Janney initiates Everest Group stock with buy rating on rebound outlook

Investing.com - Janney initiated coverage on Everest Group (NYSE:EG) with a buy rating on Friday, setting a fair value estimate of $425.00 for the global property and casualty reinsurer. According to InvestingPro data, the stock currently trades at a P/E ratio of 16.8x and appears undervalued based on its Fair Value estimate.

The research firm described Everest Group as a "top-tier global P&C reinsurer with a growing primary insurance business," noting the company’s long-term performance record of generating a median operating ROE of 12% and average annual growth in shareholder value of 11% over the past 25 years.

Janney acknowledged recent challenges, including a leadership transition at the CEO position and a $1.7 billion charge to strengthen casualty reserves as of year-end 2024, which included almost $500 million of risk margin above the actuarial central estimate. For deeper insights into Everest Group’s financial health and extensive metrics, access the comprehensive Pro Research Report available on InvestingPro.

The firm expressed confidence that Everest Group’s loss reserves are now adequate and projected a rebound to double-digit operating ROE in 2025, while management continues to re-underwrite its casualty business and pursue growth opportunities in property and specialty lines.

Everest Group shares currently trade at 0.9 times book value per share excluding accumulated other comprehensive income, which Janney considers "attractively valued relative to performance expectations," with the company having repurchased more than a million shares over the last 12 months under a 10 million share repurchase program authorized in November 2024.

In other recent news, Everest Group announced a leadership transition with Joseph V. Taranto set to retire as Chairman in May 2025, with John Graf nominated to succeed him. Additionally, Everest Group held its Annual General Meeting, where shareholders re-elected nine directors and approved a new employee stock purchase plan. The company also appointed KPMG as its independent registered public accounting firm for the fiscal year ending December 31, 2025. In terms of analyst ratings, Raymond (NSE:RYMD) James adjusted Everest Group’s price target to $410 from $420, maintaining a Strong Buy rating despite first-quarter earnings falling short of expectations. Meanwhile, Jefferies upgraded Everest Group’s stock to Buy and increased the price target to $415, citing favorable valuation metrics. The appointment of Darryl Page as an independent, non-executive board member was another significant development, bringing his extensive industry experience to the table. These changes and insights reflect Everest Group’s ongoing strategic initiatives and market evaluations.

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