Zacks senior insurance analyst Eric Rothmann, CFA is keeping his Hold recommendation on Everest Re (RE) shares. For details, we went into his latest analyst note on the company:
The 1Q07 results were significantly ahead of expectations. The increase was entirely driven by a lack of significant catastrophe loss activity in the quarter, moderating the incurred losses and loss adjustment expense line for the quarter. Prior to the conference call, we are raising our 2007 and 2008 earnings expectations to reflect 1Q07 results.
The lower loss environment masks some of our concerns with respect to top-line growth. As such, we are raising our six-month price target to $112 per share. However, we are currently maintaining our Hold rating given this morning's price action in the shares of Everest Re.
We increased our 2007 and 2008 earnings expectations to $13.95 per share and $12.90 per share, respectively, from $12.60 per share and $12.80 per share, to reflect the recently released 1Q07 results. As a result, our new six-month price target of $112.00 per share, up from $108.00 per share. Our new target price is based on slightly below peer multiple of 1.20x (driven by top line growth concerns and the potential for catastrophe losses later this year), to our estimated June 30, 2007 book value of $88.00 per share.
Read the analyst report on RE