Beazley (BEZ) AI Stock Analysis

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Beazley

(LSE:BEZ)

Rating:79Outperform

Price Target:―

Beazley's strong financial performance, marked by robust revenue growth and cash flow management, is bolstered by positive technical indicators and a favorable earnings call outlook. While valuation metrics suggest the stock is undervalued, potential market challenges and competitive pressures warrant caution. The overall score reflects a solid investment prospect with room for growth.

Beazley (BEZ) vs. iShares MSCI United Kingdom ETF (EWC)

Market Cap

£5.66B

Dividend Yield2.71%

Average Volume (3M)2.51M

Price to Earnings (P/E)6.7

Beta (1Y)0.90

Revenue Growth7.79%

EPS Growth9.99%

CountryUK

Employees2,419

SectorFinancial

Sector Strength73

IndustryInsurance - Property & Casualty

Share Statistics

EPS (TTM)0.60

Shares Outstanding624,433,170

10 Day Avg. Volume2,277,676

30 Day Avg. Volume2,505,541

Financial Highlights & Ratios

PEG Ratio0.07

Price to Book (P/B)2.38

Price to Sales (P/S)0.00

P/FCF Ratio8.52

Enterprise Value/Market Cap0.64

Enterprise Value/Revenue0.22

Enterprise Value/Gross Profit3.58

Enterprise Value/Ebitda-3.54

Forecast

1Y Price Target

£1,070.00

Price Target Upside16.24% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Beazley Business Overview & Revenue Model

Company DescriptionBeazley plc provides risk insurance and reinsurance solutions in the United States, Europe, and internationally. Its Cyber & Executive Risk segment underwrites management liabilities, such as employment practices risks and directors and officers, cyber and technology, and media and business services. The company's Marine segment underwrites various marine classes, including hull, energy, cargo and specie, piracy, satellite, aviation, kidnap and ransom, and war risks. Its Market Facilities segment underwrites portfolios of businesses. The company's Political, Accident & Contingency segment underwrites terrorism, political violence, expropriation, and credit risks, as well as contingency and risks associated with contract frustration. This segment also underwrites life, health, personal accident, sports, and income protection risks. Its Property segment provides commercial and homeowners' insurance. The company's Reinsurance segment specializes in writing property catastrophe, property per risk, casualty clash, aggregate excess of loss, and pro-rata businesses. Its Specialty Lines segment underwrites a portfolio of businesses comprising architects and engineers, healthcare, lawyers and environmental liability, market facilities business, and international financial institutions. The company was founded in 1986 and is based in London, the United Kingdom.

How the Company Makes MoneyBeazley makes money primarily through underwriting insurance policies and managing risks for clients. The company earns revenue from the premiums paid by policyholders for coverage against various risks. Additionally, Beazley invests the premiums it collects to generate investment income. Key revenue streams include professional indemnity insurance, property insurance, marine insurance, reinsurance, and specialty lines such as cyber and political risks. Beazley also benefits from its strong relationships with brokers and other industry partners, which help to expand its reach and client base. The company's performance is influenced by its underwriting profitability, investment returns, and the effective management of claims and operational expenses.

Beazley Earnings Call Summary

Earnings Call Date:Mar 04, 2025

(Q4-2024)

% Change Since: 5.97%|

Next Earnings Date:Aug 13, 2025

Earnings Call Sentiment Positive

The earnings call presented a predominantly positive outlook with record profits, strong combined ratios, and significant growth in key segments like property and cyber. However, it also highlighted challenges such as increased market competition, wildfire impacts, and ongoing cyber threats, which necessitate careful management.

Q4-2024 Updates

Positive Updates

Record Profits for Second Consecutive Year

Achieved record profits of over $1.4 billion, allowing a $700 million return to shareholders through dividends and a share buyback program.

Strong Combined Ratio

Delivered an undiscounted combined ratio of 79%, within the provided guidance of around 80%.

Growth in Property Insurance

Property team led with a 26% increase in insurance written premium, following a 64% growth in the previous year.

Cyber Division Innovations

Sponsored new cyber Cat bonds and launched Quantum consortium, enabling a $100 million primary line size.

Investment Success

Investments delivered a strong return of $574.4 million, marking a 20% increase over the prior year.

Strong Capital Position

Finished the year with a solvency capital ratio of 302% before distributions, indicating a robust capital position.

Negative Updates

Challenging Market Conditions

Faced a more normalized attritional loss ratio in the second half of the year and an active hurricane season.

Market Competition

Increasing competition in the insurance market, making growth more challenging as insurers look to expand.

Wildfires Impact

Provided a provision for wildfires that occurred in the first quarter of the year, impacting the combined ratio.

Cyber Market Challenges

Faced systemic cyber events, and the market needs to deal with increased frequency and severity of cyber threats.

Specialty Risks Exposure

Specialty risks segment exposed to social inflation, requiring ongoing active management and cycle management.

Company Guidance

During the call on March 5, 2025, Adrian Cox highlighted the company's impressive financial performance for the fiscal year 2024. The company achieved record profits for the second consecutive year, amounting to over $1.4 billion, which facilitated a return of $700 million to shareholders through a 25p dividend increase and a $500 million share buyback program. The firm's undiscounted combined ratio stood at 79%, aligning with its mid-year guidance of around 80%. The company reported a 10% growth in insurance written premium, with significant contributions from its property team, which posted a 26% increase in insurance written premium. The Cyber division also saw substantial activities, including the sponsorship of new cyber catastrophe bonds and the launch of Quantum, a consortium allowing a $100 million primary line size. Over the last decade, the firm's average return on equity was reported as 15%, with a target of maintaining a cross-cycle return at this level. The company also communicated an increase in its dividend to 25p, aligning it with the trajectory of premium growth, while indicating potential moderation in future growth due to market conditions. The projected guidance for 2025 includes a mid-80s combined ratio, reflecting anticipated market softening and recent wildfire losses.

Beazley Financial Statement Overview

Summary

Beazley exhibits strong revenue growth and a solid financial position, marked by significantly increased equity and well-managed debt levels. While profitability metrics have shown some fluctuations, cash flows have remained robust, underpinning the company's financial health. The consistent growth trajectory and effective cash management position Beazley well for future stability and potential expansion.

Income Statement

Positive

Beazley has demonstrated strong revenue growth over the past years, with a notable increase from 2019 to 2023, peaking at 5,099.5 million in 2023. The gross profit margins are robust given that gross profit equals total revenue. However, the net profit margin showed fluctuation, particularly with a negative margin in 2020. The EBIT and EBITDA margins indicate some operational challenges, as seen in 2024 with both at zero. Overall, the company is showing strong top-line growth, but profitability metrics display some volatility.

Balance Sheet

Very Positive

Beazley's balance sheet reflects a stable financial position with a healthy increase in stockholders' equity from 1,625.3 million in 2019 to 4,606.8 million in 2024. The debt-to-equity ratio has been well-managed, staying relatively low over the years, indicating prudent use of leverage. The equity ratio has improved significantly, suggesting a stronger capital base and reduced financial risk.

Cash Flow

Very Positive

The company's cash flow performance is impressive, with consistent free cash flow generation and growth over the years. The operating cash flow to net income ratio is strong, reflecting effective conversion of earnings into cash. Despite fluctuations in net income, the company has maintained positive free cash flows, highlighting operational efficiency and strong cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.01B	5.10B	3.47B	3.29B	2.91B
	Gross Profit
1.01B	584.70M	3.47B	3.29B	2.91B
	EBIT
1.42B	1.29B	584.00M	408.10M	-10.20M
	EBITDA
1.42B	-374.60M	613.90M	409.60M	0.00
	Net Income Common Stockholders
1.13B	1.03B	483.30M	308.70M	-46.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
882.10M	593.30M	652.50M	591.80M	309.50M
	Total Assets
15.42B	13.67B	15.10B	12.81B	10.59B
	Total Debt
615.60M	624.90M	620.70M	631.90M	637.20M
	Net Debt
-266.50M	-187.40M	-31.80M	40.10M	327.70M
	Total Liabilities
10.81B	9.78B	12.53B	10.68B	8.78B
	Stockholders Equity
4.61B	3.88B	2.57B	2.13B	1.81B
Cash Flow		Free Cash Flow
572.10M	338.00M	1.10B	1.17B	463.90M
	Operating Cash Flow
634.90M	393.20M	1.10B	1.17B	476.80M
	Investing Cash Flow
-62.80M	-55.20M	-1.25B	-839.20M	-611.90M
	Financing Cash Flow
-515.60M	-190.80M	235.70M	-48.00M	177.80M

Beazley Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price920.50

Price Trends

50DMA

909.47

Positive

100DMA

875.20

Positive

200DMA

818.09

Positive

Market Momentum

MACD

9.64

Positive

RSI

47.03

Neutral

STOCH

12.44

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BEZ, the sentiment is Neutral. The current price of 920.5 is below the 20-day moving average (MA) of 936.93, above the 50-day MA of 909.47, and above the 200-day MA of 818.09, indicating a neutral trend. The MACD of 9.64 indicates Positive momentum. The RSI at 47.03 is Neutral, neither overbought nor oversold. The STOCH value of 12.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:BEZ.

Beazley Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BEZ	79 Outperform	£5.66B	6.72	26.32%	2.71%	7.79%	9.99%
ADM	79 Outperform	£10.11B	15.24	56.17%	8.61%	34.86%	95.18%
LRE	76 Outperform	£1.38B	5.41	21.23%	6.36%	14.46%	-2.98%
SBRE	65 Neutral	£342.50M	9.46	14.37%	4.96%	32.88%	99.17%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.06%	12.07%	-7.97%
DLG	63 Neutral	£3.87B	26.55	5.97%	3.35%	26.11%	-29.43%
HCXLF		$5.84B	9.44	17.96%	3.46%	―	―

* Financial Sector Average

Performance Comparison

GB:BEZ

Beazley

920.50

265.75

40.59%

GB:ADM

Admiral

3,300.00

869.11

35.75%

GB:DLG

Direct Line Insurance

298.20

105.47

54.72%

GB:LRE

Lancashire Holdings

567.00

46.50

8.93%

HCXLF

Hiscox

17.30

3.35

24.01%

GB:SBRE

Sabre Insurance Group plc

137.00

-8.19

-5.64%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.