Have you been paying attention to shares of Reinsurance Group (RGA)? Shares have been on the move with the stock up 4.9% over the past month. The stock hit a new 52-week high of $230.39 in the previous session. Reinsurance Group has gained 41.1% since the start of the year compared to the 24.9% move for the Zacks Finance sector and the 32.2% return for the Zacks Insurance - Life Insurance industry.
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, Reinsurance Group reported EPS of $6.13 versus consensus estimate of $5.15.
For the current fiscal year, Reinsurance Group is expected to post earnings of $21.93 per share on $22.36 billion in revenues. This represents a 10.31% change in EPS on a 17.41% change in revenues. For the next fiscal year, the company is expected to earn $22.75 per share on $22.01 billion in revenues. This represents a year-over-year change of 3.75% and -1.58%, respectively.
Reinsurance Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Reinsurance Group has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 11.4X. On a trailing cash flow basis, the stock currently trades at 12.1X versus its peer group's average of 11.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Reinsurance Group currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Reinsurance Group fits the bill. Thus, it seems as though Reinsurance Group shares could have potential in the weeks and months to come.
Shares of RGA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is F&G Annuities & Life, Inc. (FG). FG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of F.
Earnings were strong last quarter. F&G Annuities & Life, Inc. beat our consensus estimate by 2.52%, and for the current fiscal year, FG is expected to post earnings of $5.33 per share on revenue of $5.46 billion.
Shares of F&G Annuities & Life, Inc. have gained 8.5% over the past month, and currently trade at a forward P/E of 10.93X and a P/CF of 7.93X.
The Insurance - Life Insurance industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RGA and FG, even beyond their own solid fundamental situation.
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