Economic Outlook - Investment commentators are divided on the U.S. economy's trajectory, with one camp predicting a recession and declining long-term interest rates, while the other believes government spending will prevent a recession and lead to rising long-term interest rates [2] - The U.S. budget deficit's impact on interest rates, inflation, and future taxes is crucial for market outlooks, with expectations of rising long-term interest rates due to unrestrained government spending [2][4] Property & Casualty Industry - The Property & Casualty (P&C) industry is expected to benefit from the trend of rising interest rates, as P&C insurers invest in short-duration bond portfolios, protecting them from the negative impacts of long-term rate increases [2] - A long-term upward trajectory in the P&C industry is indicated by recent interest rate trends, with notable investments from major players like Berkshire Hathaway in companies such as Chubb Limited [4] Arch Capital Overview - Arch Capital operates in P&C, Reinsurance, and Mortgage insurance, with a diversified growth-oriented approach, allowing capital allocation across segments based on market dynamics [5] - Arch's underwriting results have shown improvement, particularly in its Mortgage and Reinsurance segments, with a declining combined ratio in Insurance from 96.8% in 2021 to 91.7% in 2023 [5] Financial Performance - Arch's earnings are projected to decline to $8.57 this year but are expected to rise to $8.91 by 2025, with a more optimistic estimate of ~$11.2 next year based on various growth assumptions [6] - The company is modeling a 20 basis point increase in investment income yield, which could add approximately $7 to $10 to the stock price, indicating a potential upside of 7% to 10% [7] Strategic Insights - Arch is positioned as a growth stock, focusing on acquisitions and share repurchases rather than dividends, with a target price indicating a 23% upside over the next year [9] - The potential for a higher valuation multiple suggests an upside of 45% if a multiple of 12.5 is applied, reflecting the new trends in the market [9]

Company Performance - Arch Capital Group (ACGL) ended the recent trading session at $97.16, showing a +0.68% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.28% [1] - Over the past month, shares of Arch Capital have depreciated by 0.78%, which is better than the Finance sector's loss of 2.84% but lagging behind the S&P 500's gain of 3.78% [1] Earnings Forecast - Arch Capital Group is expected to release its earnings on July 30, 2024, with a forecasted EPS of $2.16, reflecting a 12.5% increase from the same quarter last year [2] - The revenue forecast for the upcoming quarter is $3.9 billion, indicating a growth of 21.54% compared to the corresponding quarter of the previous year [2] - For the full year, the projected earnings are $8.58 per share and revenue of $16.06 billion, showing changes of +1.54% and +19.06% respectively from the previous year [2] Analyst Projections - Recent shifts in analyst projections for Arch Capital Group are important, as positive estimate revisions are seen as a good sign for the company's business outlook [3] - The Zacks Consensus EPS estimate has increased by 0.3% in the past month, and Arch Capital currently holds a Zacks Rank of 3 (Hold) [3] Valuation Metrics - Arch Capital Group has a Forward P/E ratio of 11.25, which is lower than the industry average Forward P/E of 12.55 [4] - The company has a PEG ratio of 1.61, compared to the industry average PEG ratio of 1.57 [4] - The Insurance - Property and Casualty industry, to which Arch Capital belongs, ranks in the top 22% of all industries, with a Zacks Industry Rank of 55 [4]

Core Viewpoint - Arch Capital Group Ltd. (ACGL) presents new business opportunities, rate improvements, growth in existing accounts, favorable estimates, and a solid capital position, making it a worthy addition to investment portfolios [1] Growth Projections - The Zacks Consensus Estimate for Arch Capital's 2024 earnings per share indicates a 1.18% increase from the previous year, with revenues projected at $16 billion, reflecting an 18.5% year-over-year improvement [2] - For 2025, earnings per share and revenues are expected to increase by 6.4% and 13.7%, respectively, compared to 2024 estimates [2] - Earnings have grown by 32.3% over the past five years, outperforming the industry average of 10.5% [2] Northbound Estimate Revision - The Zacks Consensus Estimate for 2024 and 2025 earnings has increased by 1.42% and 1.56%, respectively, in the last 60 days, indicating analysts' optimism [3] Earnings Surprise History - Arch Capital has exceeded earnings estimates in each of the last four quarters, with an average surprise of 28.41% [4] Zacks Rank & Price Performance - ACGL currently holds a Zacks Rank 3 (Hold) and has seen a stock price increase of 29.1% over the past year, compared to the industry's growth of 19.1% [5] Style Score - Arch Capital has a VGM Score of A, indicating attractive value, strong growth, and promising momentum [7] Return on Equity - The annualized return on equity for Arch Capital is 24.6%, which is 230 basis points higher year-over-year and significantly above the industry average of 7.8% [8] Business Tailwinds - Arch Capital benefits from new business opportunities, rate increases, growth in existing accounts, and expansion in Australian single-premium mortgage insurance [9] - The company is pursuing inorganic growth through acquisitions, enhancing operations, and diversifying its business, including a recent agreement to acquire Allianz's U.S. MidCorp and Entertainment insurance business [9] Financial Strength - Investment income is expected to improve due to a growing base of invested assets and strong cash flows [10] - Arch Capital has a robust balance sheet characterized by high liquidity and low leverage, which supports growth initiatives [10] - The company has maintained a free cash flow conversion rate of over 85% in recent quarters, reflecting solid earnings [10] - Long-term earnings growth is projected at 6.8%, with a Growth Score of B [10]

Industry Overview - Macroeconomic headwinds such as high interest rates, inflation, poor economic growth, and global conflicts are causing market volatility [1] - Despite these challenges, the insurance industry has outperformed the Zacks S&P 500 composite and the Finance sector, with a year-to-date increase of 16.7% compared to 14.6% and 5.5% respectively [1] Factors Driving the Industry - AM Best anticipates profitable commercial lines and improving personal lines, along with higher investment returns, to enhance industry performance in 2024 [2] - Swiss Re projects a 7% growth in premiums for 2024 and a 4.5% increase for 2025, with personal auto expected to outperform other lines [2] - The combined ratio is estimated to be 98.5% in 2024, indicating improved profitability [2] Company Highlights - **Arch Capital Group Ltd. (ACGL)**: Expected long-term earnings growth rate of 6.8%, with a Zacks Consensus Estimate for 2024 indicating a year-over-year growth of 1.2% [8] - **AXIS Capital Holdings Limited (AXS)**: Anticipated long-term earnings growth rate of 27.1%, with a Zacks Consensus Estimate for 2024 showing a year-over-year growth of 2.6% [9] - **The Hartford Financial Services Group, Inc. (HIG)**: Expected long-term earnings growth rate of 12.2%, with a year-over-year increase of 11.6% in the 2024 earnings per share [10][11] - **Old Republic International Corporation (ORI)**: Expected year-over-year increase of 3.8% in 2024 earnings per share, with a recent upward revision of 1.1% in earnings estimates [11][12] Investment Insights - The insurance industry is experiencing accelerated digitalization to enhance scale and efficiency, which supports growth initiatives and shareholder returns [4] - Low-beta stocks are recommended for steady performance in turbulent markets, with a focus on stocks that have shown positive price movement and substantial trading volume [5][6][7]

The latest trading session saw Arch Capital Group (ACGL) ending at $102.43, denoting a +0.53% adjustment from its last day's close. This change outpaced the S&P 500's 0.31% loss on the day. Elsewhere, the Dow gained 0.67%, while the tech-heavy Nasdaq lost 1.09%.The property and casualty insurer's shares have seen a decrease of 1.42% over the last month, surpassing the Finance sector's loss of 1.77% and falling behind the S&P 500's gain of 2.73%.The upcoming earnings release of Arch Capital Group will be of ...

Company Performance - Arch Capital Group (ACGL) closed at $100.80, with a gain of +1.6% from the previous trading session, outperforming the S&P 500's gain of 0.25% [1] - Over the past month, shares of Arch Capital Group have decreased by 0.96%, while the Finance sector has lost 2.3% and the S&P 500 has gained 3.34% [1] - The upcoming earnings release is expected to show an EPS of $2.16, a 12.5% increase year-over-year, and projected revenue of $3.9 billion, reflecting a 21.62% rise from the same quarter last year [1] Fiscal Year Estimates - For the entire fiscal year, earnings are projected at $8.55 per share and revenue at $16 billion, indicating changes of +1.18% and +18.58% from the prior year [2] - Recent changes to analyst estimates indicate positive revisions, reflecting optimism about the company's business and profitability [2] Valuation Metrics - Arch Capital Group has a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having increased by 0.02% in the past month [3] - The company is currently trading at a Forward P/E ratio of 11.6, which is below the industry average of 12.3, suggesting it is trading at a discount [3] - The PEG ratio for Arch Capital Group is 1.7, compared to the industry average PEG ratio of 1.49 [3] Industry Overview - The Insurance - Property and Casualty industry is part of the Finance sector and holds a Zacks Industry Rank of 20, placing it in the top 8% of over 250 industries [4] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]

MEMPHIS, Tenn., June 13, 2024 /PRNewswire/ -- Pittco Management, LLC ("Pittco") is pleased to announce its equity investment in Pershing Square through a primary equity sale transaction. Pershing Square Capital Management, L.P. ("PSCM") sold a 10% common equity interest in Pershing Square Holdco, L.P. ("Pershing Square")—a newly formed limited partnership owning 100% of PSCM—to a consortium of strategic investors for $1.045 billion. In addition to Pittco, this consortium includes Arch Capital Group Ltd. (NA ...

Arch Capital Group (ACGL) closed at $99.58 in the latest trading session, marking a -0.99% move from the prior day. This change lagged the S&P 500's daily gain of 0.27%. Elsewhere, the Dow saw a downswing of 0.31%, while the tech-heavy Nasdaq appreciated by 0.88%.The the stock of property and casualty insurer has risen by 2.73% in the past month, leading the Finance sector's loss of 0.29% and undershooting the S&P 500's gain of 2.85%.The upcoming earnings release of Arch Capital Group will be of great inter ...

Arch Capital Group Ltd. (ACGL) , banking on the strength of new business opportunities, rate improvement, growth in existing accounts and a solid capital position, has performed well so far this year and has the potential to retain the momentum ahead.Shares have rallied 35.4% year to date, outperforming the industry’s growth of 15.9%, the Finance sector’s rise of 4% and the Zacks S&P 500 composite’s increase of 12.4%. With a market capitalization of $37.5 billion, the average volume of shares traded in the ...

The latest trading session saw Arch Capital Group (ACGL) ending at $99.68, denoting a -1.17% adjustment from its last day's close. This change lagged the S&P 500's daily gain of 1.19%. On the other hand, the Dow registered a gain of 0.25%, and the technology-centric Nasdaq increased by 1.96%.The property and casualty insurer's stock has climbed by 2.7% in the past month, exceeding the Finance sector's gain of 1.86% and lagging the S&P 500's gain of 3.35%.The investment community will be paying close attenti ...