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On Monday, Keefe, Bruyette & Woods indicated a positive outlook for W.R. Berkley stock, raising the price target from $65.00 to $75.00 while keeping a Market Perform rating on the shares. The adjustment follows a thorough evaluation of the company’s year-end 2024 statutory loss reserves. Analyst Meyer Shields noted that the reserves from recent accident years appear to have enough redundancy to continue supporting modest net quarterly releases moving forward.
The firm has reaffirmed its earnings per share (EPS) estimates for W.R. Berkley at $4.35 for the year 2025 and $4.95 for 2026. Additionally, Keefe, Bruyette & Woods has introduced an EPS forecast for 2027 at $5.35. This projection is based on an anticipated slowdown in premium growth and a moderate worsening of the core combined ratio, as the pace of commercial pricing increases is expected to slow down.
Shields commented on the company’s valuation, stating, "We think WRB’s current valuation (14.8x our 2026E EPS) reasonably reflects its near-term growth and profitability prospects." The analyst’s comments suggest that the current stock price fairly represents W.R. Berkley’s expected performance in the coming years.
W.R. Berkley’s stock price adjustment reflects the firm’s confidence in the company’s ability to maintain a steady release of reserves, which is a key factor in its financial health and stability. The new price target is set at 15.2 times the firm’s projected 2026 earnings per share.
Investors may view this revised price target as a sign of the company’s solid reserve practices and potential for continued financial stability, despite the forecast for a deceleration in premium growth and commercial pricing increases. The Market Perform rating indicates that the analysts believe the stock will perform in line with the overall market.
In other recent news, W. R. Berkley Corporation reported its first-quarter 2025 earnings, missing analysts’ expectations for both earnings per share (EPS) and revenue. The company posted an EPS of $1.01, falling short of the $1.05 forecast, and reported revenue of $3.01 billion, slightly below the anticipated $3.02 billion. Despite the earnings miss, W. R. Berkley achieved record net premiums written of $3.1 billion, indicating strong demand for its insurance products. The company also reported a net income of $418 million, with an annualized return on equity of 19.9%. In other developments, AM Best released a report highlighting the growth in premiums for U.S. surplus lines insurers, with a 12.1% year-over-year increase expected in 2024. This growth is driven by post-COVID macroeconomic pressures affecting various business lines. Analysts also noted that states like California, Florida, Texas, and New York account for the largest share of surplus lines premiums. Despite the challenges, W. R. Berkley remains optimistic about its performance for the remainder of 2025, with guidance indicating positive growth prospects.
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