Reinsurance Group (RGA) Upgraded to Buy: Here's What You Should Know

Zacks Rating Upgrade for Reinsurance Group - Reinsurance Group (RGA) has been upgraded to a Zacks Rank 2 (Buy), reflecting an upward trend in earnings estimates, which is a powerful force impacting stock prices [1] - The Zacks rating system relies on changes in a company's earnings picture, tracking EPS estimates for the current and following years through the Zacks Consensus Estimate [1] - The upgrade indicates positivity about Reinsurance Group's earnings outlook, which could translate into buying pressure and an increase in its stock price [3] Earnings Estimate Revisions and Stock Price Movement - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4] - Institutional investors use earnings estimates to calculate the fair value of a company's shares, and their transactions of large amounts of shares lead to price movements [4] - Rising earnings estimates and the consequent rating upgrade for Reinsurance Group imply an improvement in the company's underlying business, which investors may appreciate by pushing the stock higher [5] Zacks Rank System and Its Effectiveness - The Zacks Rank system uses four factors related to earnings estimates to classify stocks into five groups, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7] - The system maintains an equal proportion of 'buy' and 'sell' ratings for over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating and the next 15% receiving a 'Buy' rating [9] - Reinsurance Group's placement in the top 20% of Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term [10][11] Reinsurance Group's Earnings Estimates - For the fiscal year ending December 2024, Reinsurance Group is expected to earn $21.93 per share, a 10.3% increase from the year-ago reported number [8] - Over the past three months, the Zacks Consensus Estimate for Reinsurance Group has increased by 1.1%, reflecting steady upward revisions by analysts [8]