Bob Huang, an analyst from Morgan Stanley, maintained the Hold rating on Everest Group. The associated price target remains the same with $360.00.
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Bob Huang’s rating is based on Everest Group’s strategic shift towards reinsurance, which is seen as a necessary move to mitigate risks associated with their primary casualty segment. The company has taken significant steps, such as entering into an adverse development cover and selling renewal rights to AIG, to realign its focus and improve its financial stability. These actions are expected to make Everest more agile and concentrated in the reinsurance sector, which aligns with their long-term strategic goals.
Despite these positive strategic moves, there are some concerns that justify the Hold rating. The company’s expense ratio exceeded consensus estimates, indicating higher operational costs. Additionally, while the reinsurance segment performed well due to favorable conditions, growth in other areas was pressured, and the company anticipates a substantial non-operating charge related to the AIG transaction. These factors contribute to a cautious outlook, warranting a Hold recommendation.
Huang covers the Financial sector, focusing on stocks such as Progressive, Accelerant Holdings Class A, and Principal Financial. According to TipRanks, Huang has an average return of -1.7% and a 47.85% success rate on recommended stocks.
In another report released on October 20, Evercore ISI also maintained a Hold rating on the stock with a $384.00 price target.