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On Tuesday, Raymond (NSE:RYMD) James analyst C. Gregory Peters adjusted the price target on Everest Group (NYSE:EG) to $410 from the previous $420, while reiterating a Strong Buy rating on the company’s stock. The revision follows the firm’s first-quarter earnings report, which saw the stock decline by approximately 3%. According to InvestingPro data, Everest Group currently trades at $347.36, with analyst targets ranging from $330 to $489, suggesting potential upside based on consensus estimates.Want deeper insights? InvestingPro subscribers have access to comprehensive analysis, including Fair Value estimates and 10+ additional ProTips for Everest Group.
Everest Group’s earnings for the first quarter of 2025 fell short of Raymond James’ expectations and the broader market consensus, primarily due to higher-than-anticipated combined ratio results in its reinsurance and insurance segments. The reinsurance combined ratio stood at 87.1%, compared to Raymond James’ estimate of 84.7%, and the insurance combined ratio was reported at 99.1%, whereas the firm had estimated 92.7%. Despite these challenges, the company maintains a "GOOD" overall financial health score according to InvestingPro analysis, with particularly strong scores in cash flow and relative value metrics.
Despite the reduction in the price target and the underwhelming earnings results, Raymond James maintains a positive outlook on Everest Group. The analyst believes that the current market valuation already accounts for the challenges the company is facing, such as catastrophic losses, competitive pricing pressures in property and other lines of insurance, and reserve caution in primary insurance.
Looking ahead, the analyst projects minimal growth in Everest Group’s consolidated gross written premiums (GPW) for the years 2025, 2026, and 2027. However, this is expected to enable the company to adopt a more assertive strategy regarding share repurchase activities, as underwriting returns normalize and the board capitalizes on the stock’s attractive valuation. This aligns with the company’s track record of shareholder returns, including 31 consecutive years of dividend payments and a current dividend yield of 2.3%, with 14.29% dividend growth in the last twelve months.
The full details of Everest Group’s first-quarter performance and the implications for future estimates are available in Raymond James’ report titled "EG | First Look at 1Q25 Results."
In other recent news, Everest Group has announced several developments that may interest investors. Jefferies has upgraded Everest Group’s stock rating from Hold to Buy, setting a new price target of $415, citing favorable valuation and a stable investment opportunity. Keefe, Bruyette & Woods maintained their Outperform rating with a price target of $434, suggesting confidence in the company’s stock performance based on current financial data and reserve information. In leadership changes, Everest Group announced that Joseph V. Taranto will retire as Chairman in May 2025, with John Graf nominated to succeed him. Additionally, John Howard has been appointed to the Board of Directors, bringing over 30 years of industry experience. The company has also made significant compensation changes for its executives, including restricted stock awards and increased bonuses for key management personnel, as detailed in a recent SEC filing. These strategic moves reflect Everest Group’s ongoing efforts to align executive interests with shareholder returns and strengthen its leadership team.
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