Everest Re Estimates Taken Down

Tags: re
23 Oct 12:24am
Posted by ZacksResearch
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Everest Re (RE) reported 3Q08 results of $0.21 per share, versus $3.68 per share in the year ago quarter. The loss emanated from the previously announced hurricane losses, write-downs associated with the company's financial sector bond holdings and equity securities, and net realized capital losses on the sales of securities. We maintain our Hold recommendation on the shares.

Based on 3Q08 results and prior to the conference call, we are lowering our FY08E and FY09E EPS expectations are $8.89 per share and $11.70 per share, respectively, down from $11.13 per share and $12.20 per share previously. The shares of Everest Re trade at 0.79x its 3Q08 book value of $82.02 per share.

RE's valuation has continued to moderate from the 1.5x level exhibited about a year and a half ago, with Everest Re's 5-year average ROE [return on equity] remains below the peer group average. Our updated six-month price target of $69.50 per share (down from $78.00 per share), incorporates a multiple of 0.80x to our revised March 31, 2009 book value of $87.00 per share.

Read the analyst note on RE




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