Morgan Stanley analyst Bob Huang maintained a Buy rating on Arch Capital Group (ACGL – Research Report) yesterday and set a price target of $115.00.
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Bob Huang has given his Buy rating due to a combination of factors, primarily focusing on Arch Capital Group’s strong underwriting performance and financial metrics. The reinsurance segment delivered impressive results with a core combined ratio that surpassed expectations, reflecting a lower core loss ratio and expense ratio. Additionally, the underwriting income significantly exceeded predictions, bolstering the company’s overall earnings.
Furthermore, the mortgage segment also demonstrated robust underwriting, with a combined ratio that was well below consensus, driven by a strong core loss ratio. Despite a slowdown in certain areas, such as reinsurance and mortgage premium growth, the company’s ability to maintain profitability in its mortgage insurance and reinsurance segments is seen as a positive indicator of future performance. Bob Huang emphasizes the importance of balancing growth and margin, particularly in the primary insurance segment, as Arch Capital navigates a softer pricing environment, suggesting that the company remains a strong cycle manager.
Huang covers the Financial sector, focusing on stocks such as Progressive, Arch Capital Group, and Voya Financial. According to TipRanks, Huang has an average return of -1.5% and a 60.82% success rate on recommended stocks.
In another report released today, JMP Securities also maintained a Buy rating on the stock with a $125.00 price target.