RGA Stock Trading at Discount to Industry at 1.14X: Time to Hold?

Core Insights - Reinsurance Group of America (RGA) shares are trading at a discount compared to the Zacks Life Insurance industry, with a forward price-to-book value of 1.14X, lower than the industry average of 1.97X, the Finance sector's 4.18X, and the S&P 500 Composite's 8.18X [2] - RGA has a market capitalization of $13.13 billion and an average trading volume of 0.4 million shares over the last three months [2] - The company has a Value Score of A, indicating strong valuation metrics [2] Price Performance - RGA shares have lost 3.2% over the past year, while the industry has grown by 14.8%, the Finance sector by 19.7%, and the S&P 500 composite by 11.3% [5] - RGA shares are currently trading above the 50-day simple moving average of $197.98, indicating solid upward momentum [4] Earnings and Growth - RGA has a decent earnings surprise history, beating estimates in three of the last four quarters with an average surprise of 7.85% [6] - Earnings have grown by 15.3% over the past five years, outperforming the industry average of 7.8%, and the company has a Growth Score of B [11] - The Zacks Consensus Estimate for RGA's 2025 earnings per share indicates a year-over-year increase of 2.2%, with revenues projected at $23.45 billion, reflecting a 2.6% improvement [10] Analyst Sentiment and Target Price - The average target price for RGA, based on short-term price targets from 11 analysts, is $244.64 per share, suggesting a potential upside of 25.1% from the last closing price [12] Return on Invested Capital - RGA's return on invested capital (ROIC) has increased annually, with a trailing 12-month ROIC of 6%, significantly higher than the industry average of 0.6% [15] Market Position and Strategy - RGA is a leader in the traditional U.S. and Latin American markets, with a strong product line and significant value embedded in its in-force business, which is expected to generate predictable long-term earnings [17] - The company is well-capitalized and actively seeks growth opportunities while balancing capital returns to shareholders [19] - RGA is ramping up technological inclusion in its products and has maintained a free cash flow conversion rate above 85% in recent quarters [20] Final Assessment - RGA's new business volumes, favorable longevity experience, diversified business model, and effective capital deployment position it well for long-term growth [22] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum [22] - Given the solid growth projections and attractive valuations, RGA is considered a stock to hold [23]