Arch Capital Group (NASDAQ:ACGL) Issues Earnings Results

Key Points

• Arch Capital Group beat earnings expectations: The insurer reported quarterly EPS of $2.56, exceeding the $2.47 consensus estimate, while revenue reached $8.72 billion versus expectations of $4.36 billion. Net margin was 24.64% and return on equity was 17.61%.
• Shares rose 2.5% to $106.48 following the results, near the company’s 52-week high of $107.09. The stock trades at a P/E ratio of 8.18, with a consensus analyst rating of “Hold” and an average price target of $109.82.
• Analyst sentiment was mixed but generally constructive: UBS, Morgan Stanley and Citigroup raised their price targets, while eight analysts rate ACGL a Buy, seven a Hold and one a Sell. Institutional investors own 89.07% of the company’s shares.

Arch Capital Group (NASDAQ:ACGL - Get Free Report) issued its quarterly earnings data on Tuesday. The insurance provider reported $2.56 EPS for the quarter, topping analysts' consensus estimates of $2.47 by $0.09, Zacks reports. The firm had revenue of $8.72 billion for the quarter, compared to analyst estimates of $4.36 billion. Arch Capital Group had a net margin of 24.64% and a return on equity of 17.61%.

Arch Capital Group Stock Up 2.5%

Shares of ACGL stock traded up $2.60 during trading hours on Tuesday, hitting $106.48. 2,062,308 shares of the company were exchanged, compared to its average volume of 2,137,119. The company has a debt-to-equity ratio of 0.15, a quick ratio of 0.55 and a current ratio of 0.55. Arch Capital Group has a one year low of $82.44 and a one year high of $107.09. The business's 50-day simple moving average is $95.97 and its two-hundred day simple moving average is $95.89. The stock has a market capitalization of $37.20 billion, a price-to-earnings ratio of 8.18, a P/E/G ratio of 5.15 and a beta of 0.31.

Analyst Ratings Changes

A number of analysts have recently issued reports on ACGL shares. UBS Group reaffirmed a "buy" rating and set a $120.00 target price (up from $114.00) on shares of Arch Capital Group in a research report on Wednesday, July 8th. Morgan Stanley increased their price target on Arch Capital Group from $105.00 to $110.00 and gave the company an "overweight" rating in a report on Monday, July 6th. Cantor Fitzgerald restated a "neutral" rating and set a $102.00 price objective (up from $100.00) on shares of Arch Capital Group in a research note on Thursday, July 9th. Citigroup lifted their price objective on Arch Capital Group from $120.00 to $122.50 and gave the stock a "buy" rating in a report on Thursday, April 30th. Finally, Barclays upped their target price on Arch Capital Group from $104.00 to $106.00 and gave the company an "equal weight" rating in a research report on Wednesday, April 8th. Eight research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Hold" and an average price target of $109.82.

Insider Activity

In other Arch Capital Group news, Director Brian S. Posner sold 3,000 shares of Arch Capital Group stock in a transaction that occurred on Wednesday, June 3rd. The stock was sold at an average price of $19.66, for a total value of $58,980.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, Director Daniel Joseph Houston bought 5,300 shares of the stock in a transaction dated Thursday, April 30th. The shares were bought at an average cost of $94.08 per share, with a total value of $498,624.00. Following the completion of the acquisition, the director directly owned 9,915 shares of the company's stock, valued at approximately $932,803.20. The trade was a 114.84% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders own 3.30% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Morgan Stanley increased its position in Arch Capital Group by 0.8% in the fourth quarter. Morgan Stanley now owns 4,289,082 shares of the insurance provider's stock worth $411,409,000 after buying an additional 33,132 shares during the period. UBS Group AG grew its position in Arch Capital Group by 56.4% in the 3rd quarter. UBS Group AG now owns 2,738,518 shares of the insurance provider's stock worth $248,466,000 after purchasing an additional 987,398 shares during the last quarter. AQR Capital Management LLC raised its holdings in shares of Arch Capital Group by 184.1% during the fourth quarter. AQR Capital Management LLC now owns 2,670,628 shares of the insurance provider's stock valued at $256,167,000 after buying an additional 1,730,487 shares during the last quarter. Amundi raised its holdings in shares of Arch Capital Group by 17.7% during the third quarter. Amundi now owns 2,009,450 shares of the insurance provider's stock valued at $183,563,000 after buying an additional 302,126 shares during the last quarter. Finally, Two Sigma Investments LP boosted its position in shares of Arch Capital Group by 112.4% during the third quarter. Two Sigma Investments LP now owns 1,895,222 shares of the insurance provider's stock worth $171,953,000 after buying an additional 1,003,004 shares during the period. Institutional investors and hedge funds own 89.07% of the company's stock.

Arch Capital Group Company Profile

Arch Capital Group Ltd. NASDAQ: ACGL is a Bermuda-based insurance and reinsurance holding company that underwrites a broad range of property and casualty, mortgage, and specialty risk products. The company operates through a group of underwriting subsidiaries and platforms to provide insurance, reinsurance and related risk solutions tailored to commercial, institutional and individual clients.

Arch's product mix includes treaty and facultative reinsurance, primary casualty and property insurance, mortgage insurance and other specialty lines.

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