RGA Stock Trading at Discount to Industry at 1X: 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 1X, lower than the industry average of 2X and the Finance sector's 4.36X [1] - RGA has a market capitalization of $13.08 billion and an average trading volume of 0.4 million shares over the last three months [1] Group 1: Price Performance and Valuation - RGA shares have gained 2.9% over the last six months, while the industry has grown by 10.8% [3] - RGA closed at $197.93, trading above its 50-day and 200-day simple moving averages of $195.19 and $193.72, indicating solid upward momentum [4] - The average price target for RGA from nine analysts is $240.00 per share, suggesting an 18.74% upside from the last closing price [9] Group 2: Financial Performance and Growth Projections - The Zacks Consensus Estimate projects RGA's earnings per share and revenues to increase by 22.8% and 8.7%, respectively, in 2026 compared to 2025 estimates [8] - RGA's return on invested capital (ROIC) has consistently increased, reaching 5.52% in the trailing 12 months, significantly higher than the industry average of 0.6% [10] Group 3: Business Outlook and Strategy - RGA's outlook is supported by new business, stable in-force earnings, and favorable longevity trends, with growth anticipated from global protection demand and rising retirement needs [7] - The company is a leader in the U.S. and Latin American markets, with a diversified product line contributing to risk diversification and stable earnings [14] - RGA is well-capitalized, actively deploying capital into growth opportunities while also returning excess capital to shareholders through dividends and share repurchases [16][18] Group 4: Technological Integration and Market Position - RGA is ramping up technological inclusion in its products and is a global leader in biometric liability reinsurance, with favorable mortality, morbidity, and longevity experiences over the last five quarters [17] - The company has maintained a free cash flow conversion rate of over 85% in recent quarters, reflecting solid earnings [17] Group 5: Long-term Prospects - New business volumes, favorable longevity experience, and effective capital deployment are expected to favor RGA in the long term [19] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum [19]