Everest Group (EG – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Bob Huang from Morgan Stanley downgraded the rating on the stock to a Hold and gave it a $340.00 price target.
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Bob Huang has given his Hold rating due to a combination of factors that impact Everest Group’s potential for growth in the near term. The company is currently facing challenges from a $1.7 billion reserve charge, which necessitates a focus on rectifying issues within its U.S. casualty book. This remediation effort is expected to take a significant amount of time, potentially one to two years, during which the company’s growth and underwriting capabilities may be limited.
Additionally, the reinsurance segment is experiencing a downturn due to a soft market pricing environment, further constraining growth prospects. As a result, the expected earnings per share (EPS) for 2025 and 2026 have been revised downward significantly. These factors have also led to a reduction in the price target for Everest Group’s stock. Despite these challenges, the decision to rate the stock as Hold rather than Underweight reflects confidence in the management’s ability to navigate these issues and eventually steer the company back toward growth.
Huang covers the Financial sector, focusing on stocks such as Progressive, Allstate, and Arch Capital Group. According to TipRanks, Huang has an average return of -1.7% and a 59.38% success rate on recommended stocks.
In another report released yesterday, Wells Fargo also maintained a Hold rating on the stock with a $370.00 price target.