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Old Republic International Corp. (ORI)
NYSE:ORI
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Old Republic International
(NYSE:ORI)
Rating:75Outperform
Price Target:―
Positive Factors
General Insurance Growth
The General Insurance segment showed strong growth with net earned premiums increasing by 14%, beating the estimated 10%.
Specialty Insurance Performance
Old Republic's Specialty Insurance segment exceeded expectations with strong premium growth and favorable underwriting income.
Negative Factors
Revenue and Earnings Uncertainty
There are ongoing concerns about revenue and earnings uncertainty in the Title Insurance segment and broader market reserve and inflation issues in commercial auto and general liability.
Title Insurance Challenges
The Title Insurance segment underperformed due to higher-than-expected expense ratios and lower premium growth.
Old Republic International (ORI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.49B
Dividend Yield2.89%
Average Volume (3M)1.17M
Price to Earnings (P/E)12.5
Beta (1Y)0.43
Revenue Growth10.83%
EPS Growth20.74%
CountryUS
Employees9,400
SectorFinancial
Sector Strength81
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)0.81
Shares Outstanding247,163,590
10 Day Avg. Volume1,046,688
30 Day Avg. Volume1,166,909
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.67
Price to Sales (P/S)0.00
P/FCF Ratio8.86
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue0.29
Enterprise Value/Gross Profit1.11
Enterprise Value/Ebitda24.24
Forecast
1Y Price Target
$42.00Price Target Upside12.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Old Republic International Business Overview & Revenue Model
Company DescriptionOld Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company operates through three segments: General Insurance, Title Insurance, and the Republic Financial Indemnity Group Run-off Business. The General Insurance segment offers automobile extended warranty, aviation, commercial automobile, commercial multi-peril, commercial property, general liability, home warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, guaranteed asset protection, and surety. This segment provides its insurance products to businesses, government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance segment offers lenders' and owners' title insurance policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. The company was founded in 1923 and is based in Chicago, Illinois.
How the Company Makes MoneyOld Republic International (ORI) generates revenue primarily through the underwriting and sale of insurance policies across its two main business segments: General Insurance and Title Insurance. In the General Insurance Group, ORI offers various types of insurance products, including property, liability, and workers' compensation insurance, earning premiums from policyholders. The Title Insurance Group contributes to revenue by providing title insurance policies, which protect real estate owners and lenders from financial losses related to defects in the title of a property. Additionally, ORI earns investment income from its portfolio of invested assets, which includes bonds and equities, that supports its insurance operations. The company's financial performance is bolstered by its strategic partnerships with independent agents and brokers, who help distribute its insurance products to a broad client base.
Old Republic International Financial Statement Overview
Summary
Old Republic International demonstrates solid financial health with strong revenue growth and a debt-free balance sheet. However, the absence of recent EBIT and EBITDA metrics and declining free cash flow pose potential concerns for operational efficiency.Income Statement
Old Republic International shows a strong revenue growth of 13.4% in the latest year, coupled with a high gross profit margin consistently at 100%. However, the absence of EBIT and EBITDA metrics in recent years suggests a potential decline in operational profitability tracking.72
Positive
Balance Sheet
The company maintains a robust balance sheet with no debt as of the latest year, reflecting strong financial stability. The equity ratio stands at 20.2%, indicating a well-capitalized position. An increasing trend in stockholders' equity further enhances financial strength.85
Very Positive
Cash Flow
Despite the lack of operating cash flow data in the latest year, previous periods show consistent free cash flow, though there is a notable decline in free cash flow in the current year. Historical operating cash flow to net income ratios indicate efficient cash management.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 8.33B | 8.23B | 7.26B | 8.08B | 9.34B | 7.17B | Gross Profit |
| 8.33B | 8.23B | 7.26B | 8.08B | 9.34B | 7.17B | EBIT |
| 978.70M | 1.07B | 0.00 | 923.90M | 1.78B | 557.10M | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 780.80M | 852.70M | 598.60M | 686.40M | 1.53B | 558.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.10B | 3.04B | 2.82B | 12.69B | 11.40B | 11.37B | Total Assets |
| 27.06B | 27.84B | 26.50B | 25.16B | 24.98B | 22.82B | Total Debt |
| 1.99B | 1.59B | 1.59B | 1.60B | 1.59B | 966.40M | Net Debt |
| 1.85B | 1.39B | 1.39B | -11.09B | -9.81B | -10.40B | Total Liabilities |
| 20.66B | 22.22B | 20.09B | 18.99B | 1.84B | 1.10B | Stockholders Equity |
| 6.40B | 5.62B | 6.41B | 6.17B | 6.89B | 6.19B |
| Cash Flow | Free Cash Flow | ||||
| 1.30B | 1.23B | 880.40M | 1.17B | 1.31B | 1.19B | Operating Cash Flow |
| 1.30B | 1.23B | 880.40M | 1.17B | 1.31B | 1.19B | Investing Cash Flow |
| 779.70M | -3.90M | 25.30M | -415.00M | -936.50M | -845.20M | Financing Cash Flow |
| -1.95B | -1.23B | -783.20M | -832.70M | -335.70M | -300.00M |
Old Republic International Technical Analysis
Neutral
37.26
Price Trends
37.80
Negative
36.83
Positive
35.11
Positive
Market Momentum
0.06
Positive
44.20
Neutral
42.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORI, the sentiment is Neutral. The current price of 37.26 is below the 20-day moving average (MA) of 37.86, below the 50-day MA of 37.80, and above the 200-day MA of 35.11, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 44.20 is Neutral, neither overbought nor oversold. The STOCH value of 42.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ORI.
Old Republic International Risk Analysis
Old Republic International disclosed 22 risk factors in its most recent earnings report. Old Republic International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Old Republic International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $37.28B | 13.08 | 18.49% | 1.51% | 7.55% | 14.16% | |
78 Outperform | $35.30B | 9.52 | 18.42% | ― | 25.29% | -23.19% | |
77 Outperform | $5.00B | 10.71 | 8.56% | ― | 10.70% | -39.16% | |
75 Outperform | $9.49B | 12.54 | 12.68% | 2.89% | 10.83% | 20.74% | |
73 Outperform | $18.05B | 17.26 | 9.70% | 3.76% | 5.84% | -10.64% | |
65 Neutral | $4.07B | 89.75 | 60.58% | ― | 21.60% | 90.80% | |
64 Neutral | $12.66B | 9.79 | 7.67% | 17015.07% | 12.23% | -6.06% |
* Financial Sector Average
Performance Comparison
ORI
Old Republic International
37.26
8.59
29.96%
ACGL
Arch Capital Group
91.97
-4.95
-5.11%
ESGR
Enstar Group
334.50
31.27
10.31%
HIG
Hartford Financial
129.05
30.12
30.45%
PFG
Principal Financial
77.35
-1.26
-1.60%
GSHD
GooseHead Insurance
107.24
50.58
89.27%
Old Republic International Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: -1.87%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth and profitability in specialty insurance and improved investment performance. Despite challenges in the real estate market and economic uncertainties, the company showed resilience and strategic focus on growth and profitability.Q1-2025 Updates
Positive Updates
Increased Pre-Tax Operating Income
Consolidated pre-tax operating income increased to $252.7 million from $231.5 million in the first quarter of 2024.
Specialty Insurance Growth
Specialty insurance grew net premiums earned by 13% and produced $260 million of pre-tax operating income, up from $220 million last year.
Title Insurance Revenue Increase
Title insurance premiums and fees grew by 11% in the first quarter, with pre-tax operating income increasing to $4.3 million from $2.3 million last year.
Strong Investment Performance
The investment portfolio increased by nearly $200 million, with the equity portfolio up nearly $60 million in the quarter.
Improved Combined Ratios
The consolidated combined ratio improved to 93.7 from 94.3, and the specialty insurance combined ratio improved to 89.8 from 90.3.
Return on Equity Improvement
Operating return on equity improved to an annualized rate of 14.4%, compared to 11.5% in the first quarter last year.
Negative Updates
Challenging Real Estate Market
Despite growth, the title insurance segment continues to face challenges due to higher mortgage interest rates and a tight real estate market.
Expense Ratio Concerns in Title Insurance
The title insurance combined ratio remains elevated at 102.1%, reflecting ongoing market challenges.
Impact of Tariffs and Economic Uncertainty
There are concerns about the potential impact of tariffs and economic uncertainty on various segments, particularly in Canadian business and travel accident insurance.
Company Guidance
During the Old Republic International Corporation's first quarter 2025 earnings call, the company reported a consolidated pre-tax operating income of $252.7 million, an increase from $231.5 million in the same quarter of 2024. The consolidated combined ratio improved to 93.7 from 94.3 last year. Specialty insurance saw a 13% growth in net premiums earned, achieving $260 million in pre-tax operating income, with a combined ratio of 89.8, down from 90.3. Title insurance premiums and fees grew by 11%, reaching $4.3 million in pre-tax operating income, with a combined ratio of 102.1, slightly better than last year's 102.5. The company's net operating income rose to $202 million, a 21% increase per share from $0.67 to $0.81. Investment income saw a 4% increase, with a bond portfolio yield of 4.6%. Favorable development in loss reserves contributed 2.6 percentage points to the consolidated loss ratio, up from 2.3 last year. The quarter concluded with a book value per share of $24.19, reflecting a 7% increase. The company returned capital to shareholders through a $500 million special dividend, a $68 million regular dividend, and $25 million in share repurchases, with $200 million remaining in the repurchase program.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.