W.R. Berkley stock maintains Buy rating at Truist despite lowered estimates

Published 02/07/2025, 16:02
W.R. Berkley stock maintains Buy rating at Truist despite lowered estimates

Investing.com - Truist Securities maintained its Buy rating on W.R. Berkley (NYSE:WRB) on Wednesday, keeping its price target at $80.00 despite trimming quarterly earnings estimates. According to InvestingPro data, the stock appears undervalued at current levels, with the company maintaining strong financial health metrics and a 25.7% year-to-date return.

The financial services firm reduced its second-quarter earnings per share estimate for W.R. Berkley to $0.98 from $1.07, citing multiple factors including tariff-related impacts, catastrophe losses, and foreign exchange costs. The company, which has maintained dividend payments for 51 consecutive years, is set to report its next earnings on July 21.

Truist also lowered its full-year forecast to $4.25 from $4.40, pointing to a 70-basis point sequential increase in the 2025 current accident year loss estimate to account for tariff-related impacts.

The firm now projects Insurance segment catastrophe losses of $81 million, up from its previous estimate of $54 million, while also factoring in sustained foreign exchange losses of $20 million compared to $19 million in the first quarter.

Truist maintained its outlook for 8.4% growth in net premiums written for W.R. Berkley, a slight decrease from 9.9% growth in the first quarter, and kept its $80 price target, representing 16 times next year’s estimated earnings per share of $4.95. InvestingPro analysis reveals additional insights about WRB’s financial strength, with 5 more exclusive ProTips and comprehensive metrics available to subscribers through the platform’s detailed research reports.

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 this, W. R. Berkley achieved record net premiums written of $3.1 billion. Additionally, the company declared a special cash dividend of 50 cents per share and increased its regular quarterly dividend by 12.5% to 9 cents per share.

Analysts have been actively adjusting their outlooks on W. R. Berkley. Goldman Sachs downgraded the company’s stock from Buy to Neutral, citing concerns about reserve adequacy and valuation, but raised the price target from $74.00 to $76.00. Conversely, Keefe, Bruyette & Woods raised their price target to $75.00, maintaining a Market Perform rating, with confidence in the company’s reserve practices.

These developments come as the U.S. surplus lines market, which includes non-admitted insurers like W. R. Berkley, experiences premium growth driven by market pressures in the property/casualty segment. Analysts and investors are closely monitoring these dynamics as they assess the company’s financial health and future performance.

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