Everest Group’s Strong Market Position and Undervalued Shares Justify Buy Rating

Everest Group (EG) has received a new Buy rating, initiated by Janney Montgomery analyst, Robert Farnam.

Robert Farnam has given his Buy rating due to a combination of factors that highlight Everest Group’s strong market position and financial performance. Everest Group is recognized as a leading global property and casualty reinsurer with a growing presence in the primary insurance sector. The company has demonstrated a robust track record over the past 25 years, achieving a median operating return on equity (ROE) of 12% and an average annual growth in shareholder value of 11%. Despite recent challenges, such as a leadership transition and a significant charge to bolster casualty reserves, the company is poised for growth in property and specialty lines.
Farnam also notes that Everest Group’s shares are currently undervalued, trading at 0.9 times book value per share (BVPS) excluding accumulated other comprehensive income (AOCI), which is attractive given the expected performance. The company’s management has been proactive in repurchasing shares, with over a million shares bought back in the past year, and plans for continued repurchases. Additionally, Everest Group’s competitive advantages, such as its diversified business model and strong credit ratings from major agencies, further support the Buy rating. The fair value estimate of $425 reflects a forward-looking perspective on the company’s potential for growth and profitability.