Reinsurance Group of America (NYSE:RGA) Shares Gap Down on Disappointing Earnings

Key Points

• Reinsurance Group of America shares gapped down significantly after reporting a weaker than expected earnings, with an EPS of $4.72 compared to the consensus estimate of $5.58.
• The company announced a quarterly dividend increase to $0.93 per share, up from $0.89, indicating a commitment to return value to shareholders despite disappointing earnings.
• Analysts have mixed views on RGA, with several firms adjusting their price targets; the average consensus price target is now $244.36, with a "Moderate Buy" rating.

Reinsurance Group of America, Incorporated (NYSE:RGA - Get Free Report)'s stock price gapped down before the market opened on Friday following a weaker than expected earnings announcement. The stock had previously closed at $192.45, but opened at $176.16. Reinsurance Group of America shares last traded at $167.05, with a volume of 122,382 shares trading hands.

The insurance provider reported $4.72 EPS for the quarter, missing the consensus estimate of $5.58 by ($0.86). The firm had revenue of $5.60 billion during the quarter, compared to analysts' expectations of $5.70 billion. Reinsurance Group of America had a net margin of 3.77% and a return on equity of 13.69%. The firm's revenue was up 14.8% compared to the same quarter last year. During the same quarter last year, the company posted $5.48 EPS.

Reinsurance Group of America Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, August 26th. Stockholders of record on Tuesday, August 12th will be paid a $0.93 dividend. This represents a $3.72 dividend on an annualized basis and a dividend yield of 2.2%. This is a boost from Reinsurance Group of America's previous quarterly dividend of $0.89. Reinsurance Group of America's payout ratio is presently 30.04%.

Wall Street Analyst Weigh In

RGA has been the subject of a number of analyst reports. Raymond James Financial restated a "market perform" rating on shares of Reinsurance Group of America in a research note on Friday, May 23rd. Keefe, Bruyette & Woods boosted their target price on shares of Reinsurance Group of America from $250.00 to $255.00 and gave the stock an "outperform" rating in a research report on Wednesday, May 7th. Wells Fargo & Company restated an "overweight" rating and issued a $249.00 target price (up from $248.00) on shares of Reinsurance Group of America in a research note on Thursday, July 10th. JPMorgan Chase & Co. boosted their price target on shares of Reinsurance Group of America from $237.00 to $264.00 and gave the company an "overweight" rating in a report on Tuesday, July 8th. Finally, Morgan Stanley boosted their price target on shares of Reinsurance Group of America from $209.00 to $210.00 and gave the company an "equal weight" rating in a report on Monday, July 14th. Four research analysts have rated the stock with a hold rating and eight have given a buy rating to the company's stock. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus target price of $244.36.

Institutional Trading of Reinsurance Group of America

A number of hedge funds have recently modified their holdings of RGA. American Century Companies Inc. raised its position in shares of Reinsurance Group of America by 67.9% in the 1st quarter. American Century Companies Inc. now owns 1,511,927 shares of the insurance provider's stock valued at $297,699,000 after acquiring an additional 611,226 shares during the period. FMR LLC raised its position in shares of Reinsurance Group of America by 11.1% in the 4th quarter. FMR LLC now owns 5,640,788 shares of the insurance provider's stock valued at $1,205,042,000 after acquiring an additional 564,693 shares during the period. Nordea Investment Management AB raised its holdings in Reinsurance Group of America by 534.1% during the 2nd quarter. Nordea Investment Management AB now owns 570,386 shares of the insurance provider's stock worth $112,828,000 after buying an additional 480,435 shares during the period. GAMMA Investing LLC raised its holdings in Reinsurance Group of America by 54,931.6% during the 1st quarter. GAMMA Investing LLC now owns 474,923 shares of the insurance provider's stock worth $93,512,000 after buying an additional 474,060 shares during the period. Finally, Nuveen LLC acquired a new stake in Reinsurance Group of America during the 1st quarter worth approximately $69,092,000. 95.11% of the stock is currently owned by institutional investors and hedge funds.

Reinsurance Group of America Stock Down 12.8%

The company has a debt-to-equity ratio of 0.50, a quick ratio of 0.16 and a current ratio of 0.16. The stock has a market capitalization of $11.09 billion, a price-to-earnings ratio of 14.14 and a beta of 0.62. The firm's fifty day simple moving average is $197.69 and its 200 day simple moving average is $199.03.

Reinsurance Group of America Company Profile

Reinsurance Group of America, Incorporated engages in reinsurance business. The company offers individual and group life and health insurance products, such as term life, credit life, universal life, whole life, group life and health, joint and last survivor insurance, critical illness, disability, and longevity products; asset-intensive and financial reinsurance products; and other capital motivated solutions.

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