ProAssurance (PRA) shares soared 48.1% in the last trading session to close at $23.02. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.1% gain over the past four weeks.
ProAssurance's rally can be attributed to the announcement of its acquisition by The Doctors Company at a significant premium. Following the announcement of the agreed-upon purchase price of $25.00 per share, PRA’s shares immediately sparked investor demand. Such a premium signals strong confidence in ProAssurance's value, encouraging traders to buy shares in anticipation of the deal closing successfully.
ProAssurance’s expertise in medical liability, life sciences, and workers' compensation aligns well with The Doctors Company's mission, making the combined entity more competitive. The deal has been unanimously approved by ProAssurance’s board, while shareholders’ and regulatory approvals are still pending. The deal is expected to close by the first half of 2026.
This medical professional liability insurer is expected to post quarterly earnings of $0.18 per share in its upcoming report, which represents a year-over-year change of +125%. Revenues are expected to be $270.66 million, down 4% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For ProAssurance, the consensus EPS estimate for the quarter has been revised 3.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PRA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
ProAssurance is part of the Zacks Insurance - Property and Casualty industry. CNA Financial (CNA), another stock in the same industry, closed the last trading session 0.1% lower at $49.20. CNA has returned -0.1% in the past month.
For CNA Financial , the consensus EPS estimate for the upcoming report has changed -8.6% over the past month to $1.17. This represents a change of -10% from what the company reported a year ago. CNA Financial currently has a Zacks Rank of #4 (Sell).
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This article originally published on Zacks Investment Research (zacks.com).
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