Everest Group's New Management Team Needs To Take These 'Bold Steps': Analyst

After the CEO change at Everest Group Ltd. EG, the new management team needs to take bold steps, like setting lower expectations and put in efforts to ensure the stock produces results more consistently, according to BMO Capital Markets.

The Everest Group Analyst: Analyst Michael Zaremski upgraded the rating for Everest Group from Market Perform to Outperform, while raising the price target from $372 to $453.

The Everest Group Thesis: The company announced Wednesday the departure of its CEO and named Jim Williamson as the acting CEO, Zaremski said in the upgrade note.

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"Given how long EG's relative underperformance has persisted, we estimate it gives EG's CEO and board more willingness to reset the decks lower in both of its operating segments, which we think investors will ultimately applaud over the course of 2025, so long as EG can indeed start printing healthy EPS results come 2025 earnings," the analyst wrote.

While Everest Group could record a reserve charge of $800-$900 million in the fourth quarter, it's debt-to-cap ratio of just 14% "leaves ample room for such a charge," he added.

"The backdrop of returns for insurance stocks appears to remain very good, largely due to the higher-for-longer interest rate environment and excellent re-insurance terms and conditions in which re-insurers are further away from risk," Zaremski further stated.

EG Price Action: Shares of Everest Group had declined by 2.42% to $359.44 at the time of publication on Friday.

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