Everest Group Lags Industry, Trades at a Discount: Time to Hold?

Shares of Everest Group, Ltd. EG have risen 5.2% in the past three months, underperforming the industry’s growth of 9.9%.

EG's shares have lagged the industry primarily due to a second-quarter earnings miss, declining premium volumes, reduced casualty business, softer property-catastrophe pricing and lower investment income, which have weighed on investor sentiment.

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Shares of other insurers like American International Group AIG, Aegon NV AEG and Assurant, Inc. AIZ have gained 0.4%, 12.1% and 11.1%, respectively, over the past three months.

EG’s Attractive Valuation

EG’s shares are trading at a discount compared with the industry. Its trailing 12-month price-to-book value of 0.91X is lower than the industry average of 2.97X. The insurer has a Value Score of A.

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Shares of other insurers like AIG, AEG and AIZ are also trading at a discount to the industry average.

EG’s Growth Projection

The Zacks Consensus Estimate for Everest Group’s 2026 earnings per share (EPS) is pinned at $53.13, indicating a year-over-year increase of 19.3%. The estimate for 2026 revenues is pegged at $15.76 billion, implying a year-over-year decline of 9.9%. The consensus estimate for 2027 EPS indicates an increase of 11.9%, while revenues indicate a decrease of 4.2% from the corresponding 2026 estimates.

EG’s earnings grew 18% in the last five years, better than the industry average of 10.7 %. The expected long-term earnings growth is pegged at 9.6%.

Mixed Analyst Sentiment on EG

The company has witnessed five upward earnings estimate revisions for 2026 over the past 60 days, against two downward revisions. For 2027, it has witnessed two upward and downward revisions. Thus, the Zacks Consensus Estimate for 2026 earnings has moved north by 0.6%, while the consensus mark for 2027 has moved south by 0.9% over the same period.

EG’s Return on Invested Capital

The return on invested capital in the trailing 12 months was 8.9 %, better than the industry average of 2.2%, reflecting the company’s efficiency in utilizing funds to generate income.

What Drives EG?

Reinsurance Treaty remains a key contributor to Everest Group’s underwriting profitability, supported by disciplined underwriting, favorable reserve development and strong risk selection. In the second quarter of 2026, the business delivered an 88.5% combined ratio, highlighting effective portfolio management. Meanwhile, the Global Wholesale & Specialty business continues to gain traction, supported by portfolio optimization, improved underwriting and growth in higher-margin specialty lines. The segment recorded double-digit international growth across financial lines, marine, political violence and select specialty property markets, thereby supporting diversification and profitable growth.

Although property-catastrophe pricing has moderated, EG continues to enhance portfolio quality by reducing exposure to lower-return casualty and retail insurance businesses while expanding higher-margin specialty and short-tail lines. Property-catastrophe rates declined about 10% for Everest Group versus a 15-20% decline across the industry during midyear renewals, highlighting its relative pricing resilience. The company also maintains conservative reserve practices, with favorable property reserve development and no material adverse U.S. casualty reserve movements, reflecting disciplined risk management and supporting earnings quality.

Everest Group is actively scaling operations in markets such as Mexico, Colombia, Australia and Italy, targeting regions with strong insurance demand and underpenetrated segments. Mexico and Colombia offer growth opportunities, driven by rising insurance adoption and demand for customized solutions. Australia and Italy provide exposure to developed markets with an increasing need for specialty and non-life coverage.

Everest Group's third-party capital platform continues to expand, with Mount Logan Capital Management’s AUM reaching approximately $3.4 billion as of July 1, 2026, up 89% from the beginning of 2025. The launch of Annapurna Re provides another avenue to transfer risk, support growth and enhance capital flexibility. Management expects to receive approximately $200 million in premiums per quarter.

The company also maintains a strong cash position and continues to enhance shareholder returns through regular dividends and an aggressive share repurchase program. It repurchased $395 million of shares during the second quarter and paid $78 million in dividends. Management expects a minimum quarterly buyback pace of $300 million throughout 2026.

Risks for EG Stock

Property catastrophe reinsurance pricing continues to soften, which may weigh on premium growth and margins despite favorable policy terms.

Everest Group faces foreign exchange risk as it operates in currencies such as the euro, pound and Canadian dollar while reporting in U.S. dollars.

Everest Group remains vulnerable to large catastrophe losses and geopolitical events. Large natural disasters or geopolitical events could increase claims and adversely impact underwriting profitability.

Conclusion

Everest Group is poised for growth in underwriting discipline, international insurance expansion, a growing third-party capital platform and strong financial flexibility. The attractive valuation and higher returns are the other positives. However, foreign exchange volatility, geopolitical tensions and catastrophe losses continue to be concerns. It is wise to adopt a wait-and-see approach towards this Zacks Rank #3 (Hold) stock presently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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