On Friday, Evercore ISI adjusted its outlook on Reinsurance Group of America (NYSE:RGA), raising the price target to $225 from the previous $215 while maintaining an Outperform rating. The investment firm's decision followed Reinsurance Group of America's robust performance, citing particularly strong revenue growth and underwriting results in a seasonally weaker quarter.
The revised price target reflects an increase of approximately 4-5% over the prior target, driven by updated earnings per share (EPS) estimates and the valuation impact of new biometric data disclosures. The analyst noted that for the second to fourth quarter of 2024, the EPS estimates are up by around 4%, and for the year 2025, there is a 3% increase.
The improved financial forecast is partially attributed to the deferred profits accumulated over the last five quarters, which have been reassessed in light of the recent biometric data. The firm highlighted that the additional $3 of deferred profits per the biometric data contributed to the price target adjustment.
Evercore ISI's analysis also pointed out that the underwriting results were very strong, which is noteworthy as it occurred during what is typically a weaker seasonal quarter. This indicates that Reinsurance Group of America has managed to outperform expectations during a period when performance is generally lower.
InvestingPro Insights
The recent price target upgrade for Reinsurance Group of America (NYSE:RGA) by Evercore ISI aligns with several positive indicators reflected in real-time data and InvestingPro Tips. With a robust market capitalization of $12.58 billion and a forward-looking P/E ratio of 13.94, RGA demonstrates a sound valuation relative to its earnings. The company's revenue has witnessed a significant growth of 24.48% over the last twelve months as of Q1 2024, underscoring the firm's strong revenue trajectory.
InvestingPro Tips also reveal that RGA has raised its dividend for 14 consecutive years and has maintained dividend payments for an impressive 32 consecutive years, signaling a commitment to shareholder returns. Additionally, the company is trading at a low P/E ratio relative to near-term earnings growth, which could indicate a potentially undervalued stock. Analysts have revised their earnings upwards for the upcoming period, further bolstering the positive sentiment around RGA's financial health.
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