JMP reiterates Market Outperform rating on Arch Capital stock at $125

Investing.com - JMP Securities has reiterated its Market Outperform rating and $125.00 price target on Arch Capital Group (NASDAQ:ACGL), a $32.1 billion market cap insurer, following the company’s better-than-expected second-quarter 2025 results. According to InvestingPro data, the company appears undervalued based on its Fair Value analysis, with six analysts recently revising earnings estimates upward.

JMP views Arch Capital as a "best-in-class company" deserving of a premium valuation due to its consistently strong operating results and proactive cycle management. The company’s current P/E ratio of 8.63 and price-to-book ratio of 1.55 suggest attractive valuations, while its "GREAT" financial health score on InvestingPro supports JMP’s positive outlook. The price target represents 1.8 times forward book value and approximately 14 times 2026 estimated earnings per share.

The firm notes that Arch’s core property and casualty insurance and reinsurance businesses remain in a strong position as hard market conditions largely persist, with casualty lines reaccelerating while certain property lines moderate.

JMP believes Arch Capital is positioned to be one of the biggest beneficiaries of the P&C hard market due to its global distribution network and underwriting expertise, allowing it to recognize market improvements early and gain market share over several renewal periods.

The research firm also highlighted Arch’s conservative loss reserves at a time when balance sheets are under increasing investor scrutiny, noting the company’s cycle management approach of writing less casualty business during soft markets than during hard markets.

In other recent news, Arch Capital Group reported second-quarter earnings that exceeded analyst expectations. The company posted adjusted earnings of $2.58 per share, surpassing the analyst consensus of $2.30. Revenue for the quarter reached $4.35 billion, slightly above the estimated $4.34 billion. This performance was driven by strong underwriting results across its insurance, reinsurance, and mortgage segments. Arch Capital Group achieved a 22.9% annualized net income return on average common equity. These recent developments highlight the company’s solid financial performance in the latest quarter.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.