RLI (NYSE:RLI) Shares Gap Down - Should You Sell?

Key Points

• RLI shares gapped down at the open, falling from a prior close of $51.50 to an opening price of $49.24 before last trading near $49.55.
• Analysts are mixed on the stock, with recent downgrades from Wall Street Zen and Weiss Ratings offset by an upgrade from Keefe, Bruyette & Woods. The consensus rating remains Hold, with a target price of $61.50.
• RLI recently beat earnings estimates with $0.83 EPS, but revenue came in below expectations. The company also raised its quarterly dividend to $0.18 per share, and both the CEO and COO recently bought shares.

RLI Corp. (NYSE:RLI - Get Free Report)'s stock price gapped down before the market opened on Friday . The stock had previously closed at $51.50, but opened at $49.24. RLI shares last traded at $49.55, with a volume of 22,128 shares.

Analyst Upgrades and Downgrades

A number of analysts have recently commented on RLI shares. Keefe, Bruyette & Woods upgraded RLI from a "moderate buy" rating to a "strong-buy" rating in a research report on Tuesday, February 24th. Wall Street Zen lowered shares of RLI from a "hold" rating to a "sell" rating in a research report on Saturday, May 2nd. Wells Fargo & Company lowered their target price on shares of RLI from $59.00 to $55.00 and set an "equal weight" rating on the stock in a research report on Thursday, April 9th. Weiss Ratings downgraded shares of RLI from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Friday, May 22nd. Finally, Zacks Research upgraded shares of RLI from a "strong sell" rating to a "hold" rating in a research note on Thursday, April 2nd. One analyst has rated the stock with a Strong Buy rating, five have issued a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus target price of $61.50.

RLI Price Performance

The stock has a market capitalization of $4.64 billion, a PE ratio of 11.77 and a beta of 0.42. The stock has a 50 day moving average of $54.72 and a two-hundred day moving average of $59.38.

RLI (NYSE:RLI - Get Free Report) last announced its quarterly earnings data on Wednesday, April 22nd. The insurance provider reported $0.83 EPS for the quarter, beating the consensus estimate of $0.73 by $0.10. RLI had a net margin of 20.81% and a return on equity of 17.72%. The firm had revenue of $423.87 million during the quarter, compared to analysts' expectations of $564.47 million. During the same quarter last year, the business earned $0.92 earnings per share. The business's revenue for the quarter was up 4.0% compared to the same quarter last year. As a group, research analysts predict that RLI Corp. will post 2.75 earnings per share for the current fiscal year.

RLI Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Friday, June 12th. Investors of record on Friday, May 29th will be issued a dividend of $0.18 per share. This is a boost from RLI's previous quarterly dividend of $0.16. This represents a $0.72 annualized dividend and a yield of 1.4%. The ex-dividend date of this dividend is Friday, May 29th. RLI's payout ratio is presently 14.95%.

Insider Transactions at RLI

In other RLI news, CEO Craig W. Kliethermes acquired 2,000 shares of the stock in a transaction that occurred on Wednesday, May 27th. The shares were purchased at an average cost of $52.00 per share, with a total value of $104,000.00. Following the purchase, the chief executive officer owned 150,990 shares in the company, valued at approximately $7,851,480. The trade was a 1.34% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, COO Jennifer L. Klobnak bought 2,000 shares of RLI stock in a transaction that occurred on Wednesday, May 27th. The stock was bought at an average cost of $52.72 per share, for a total transaction of $105,440.00. Following the purchase, the chief operating officer owned 104,318 shares in the company, valued at $5,499,644.96. This represents a 1.95% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Over the last three months, insiders purchased 11,000 shares of company stock worth $576,280. 2.39% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On RLI

A number of institutional investors and hedge funds have recently bought and sold shares of the stock. Farther Finance Advisors LLC raised its stake in RLI by 94.4% in the 4th quarter. Farther Finance Advisors LLC now owns 414 shares of the insurance provider's stock valued at $26,000 after purchasing an additional 201 shares during the last quarter. Northwestern Mutual Wealth Management Co. raised its stake in RLI by 156.4% during the third quarter. Northwestern Mutual Wealth Management Co. now owns 464 shares of the insurance provider's stock worth $30,000 after purchasing an additional 283 shares during the period. MassMutual Private Wealth & Trust FSB increased its stake in RLI by 72.1% during the fourth quarter. MassMutual Private Wealth & Trust FSB now owns 618 shares of the insurance provider's stock worth $40,000 after acquiring an additional 259 shares during the last quarter. AlphaQuest LLC acquired a new stake in RLI during the third quarter worth about $43,000. Finally, Eagle Bay Advisors LLC purchased a new stake in RLI during the fourth quarter worth approximately $43,000. Hedge funds and other institutional investors own 77.89% of the company's stock.

About RLI

RLI Corporation NYSE: RLI is a specialty property and casualty insurance company focused on underwriting niche risks for businesses and individuals. Headquartered in Peoria, Illinois, the company operates through a network of independent agents and brokers, offering customized coverage solutions. RLI's approach emphasizes disciplined underwriting, targeted product development and strong customer service to maintain profitability and long-term growth.

Founded in 1965 as Replacement Lens, Inc, RLI initially provided insurance for contact lens manufacturers before shifting its focus to specialty insurance in the 1980s.

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