Market Overview

Reinsurance Group's Stock Price Has Finally Caught Up To Its Value

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Deutsche Bank downgraded Reinsurance Group of America Inc (NYSE: RGA) shares from Buy to Hold rating citing valuation. However, the firm increased its target price from $108 to $112 on the stock to reflect market stabilization and roll forward of one quarter.

Analyst Yaron Kinar pointed out that the stock has already delivered 30 percent returns thus topping the returns of 6 percent for S&P 500 and 7 percent of the life insurance group. He thinks the company could continue to deliver mid-to-high single-digit-top-line growth.

In a note, the brokerage said, "We find the defensive nature of the business, along with the top-line growth prospects that stem from the business mix shift and exposure to markets with demographic and economic growth, to be attractive. However, these features are largely priced in given the YTD appreciation in value of RGA shares."

The company is scheduled to announce its third quarter results on October 26. Deutsche Bank pointed out that EPS have been revised upwards already. Also, the comparisons with the previous year favor RGA. Therefore, the firm does not expect a big positive EPS surprise in the third quarter.

The brokerage expects EPS of $2.28 for the third quarter, which is below the consensus estimates of $2.37, for the third quarter.

RGA traded at $109.75, down 0.33 percent.

Latest Ratings for RGA

Nov 2017Morgan StanleyMaintainsUnderweight
Oct 2017Goldman SachsInitiates Coverage OnBuy
Jan 2017CitigroupInitiates Coverage OnBuy

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Posted-In: Deutsche Bank Yaron KinarAnalyst Color Price Target Reiteration Analyst Ratings


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