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On Friday, Keefe, Bruyette & Woods research firm maintained their Outperform rating on Everest Group (NYSE:EG) shares with a steady price target of $434.00. The firm’s analysts reviewed the company’s year-end 2024 Generally Accepted Accounting Principles (GAAP) loss reserve triangles and concluded that Everest Group’s reserves were likely overstated by approximately $504 million. This overstatement indicates that the need for further reserve strengthening in the near term is improbable. The company’s solid financial position is reflected in its healthy current ratio of 1.37 and modest debt-to-equity ratio of 0.27, according to InvestingPro data.
Everest Group’s reserve development for the calendar year 2024 included an increase in Insurance and Reinsurance casualty reserves across all disclosed accident years. This was partially balanced by the release of property reserves from more recent accident years. The analysts pointed out that the granularity of the company’s GAAP loss triangles was limited, and they intend to conduct a more thorough reserve review upon the release of the company’s more detailed 2024 global loss triangles.
Keefe, Bruyette & Woods have projected earnings per share (EPS) for Everest Group at $49.05 for 2025 and $62.40 for 2026. These estimates are based on the assumption of modest net reserve releases of $30 million for 2025 and $52 million for 2026. The firm’s analysis and expectations are rooted in the current financial data and reserve information provided by Everest Group.
The price target of $434.00 represents 120% of the company’s estimated year-end 2025 book value per share (BVPS), reflecting the analysts’ confidence in Everest Group’s stock performance. The Outperform rating suggests that Keefe, Bruyette & Woods believe the stock will perform better than the overall market or its sector in the coming months.
In other recent news, Everest Group reported a fourth-quarter net loss of $593 million, or $13.96 per share, which surprised analysts who had anticipated a profit of $12.78 per share. The company’s revenue also fell short, reaching $4.03 billion compared to the expected $4.42 billion. This financial performance was impacted by a $1.3 billion reserve strengthening in its U.S. casualty business, leading to a combined ratio of 239.2% for its Insurance segment. In contrast, the Reinsurance segment saw a 12.6% increase in gross written premiums, totaling $3.3 billion. Additionally, Everest Group has announced significant executive compensation changes, awarding restricted stock valued at $2.5 million to CEO Jim Williamson and $1.5 million to CFO Mark Kociancic. On the analyst front, Morgan Stanley (NYSE:MS) downgraded Everest Group’s stock from Overweight to Equalweight, citing concerns over the company’s growth and underwriting profile. Meanwhile, TD Cowen maintained a Hold rating with a price target of $405, noting that the fourth-quarter earnings miss was expected due to the casualty reserve charge. Finally, Everest Group appointed John Howard as a new independent, non-executive member of its Board of Directors, leveraging his extensive experience in the insurance industry.
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