Janney Initiates Everest Group (EG) with 'Buy' Rating, Anticipates Strong Rebound

NEW YORK, NY – June 20, 2025 – Janney Montgomery Scott has initiated coverage on Everest Group (NYSE:EG), a global leader in property and casualty reinsurance, with a 'Buy' rating and a fair value estimate of $425. The initiation comes as Janney highlights Everest's robust long-term performance trajectory and an attractive valuation following recent strategic reserve adjustments.

Everest Group has consistently demonstrated strong financial performance over the past quarter-century. The company, which is also expanding its presence in primary insurance, has achieved a median operating return on equity (ROE) of 12% and an impressive average annual shareholder value growth of 11% over the last 25 years. This track record underscores its resilience and operational efficiency within the competitive insurance landscape.

Earlier this year, Everest underwent two significant corporate developments. The first was a change in leadership, with a new CEO taking the helm. The second, and perhaps more impactful, was a substantial $1.7 billion charge taken to strengthen its casualty reserves. This charge included a nearly $500 million risk margin buffer, a proactive measure designed to enhance the company's financial stability. While these adjustments temporarily affected near-term earnings, Janney views this strategic 'reserve reset' as a critical step that has positioned Everest for a healthier balance sheet and more sustainable, long-term growth.

Looking ahead, Everest is actively re-underwriting its casualty portfolio to optimize risk exposure and profitability. Concurrently, the company is pursuing strategic expansion opportunities within the property and specialty insurance lines, aiming to diversify its revenue streams and capitalize on favorable market conditions. Janney analysts project that Everest will achieve a return to double-digit operating ROE by 2025, signaling a strong recovery and improved profitability metrics.

Janney also emphasizes the compelling valuation of Everest's shares. Currently, the stock is trading at approximately 0.9 times its book value per share, excluding accumulated other comprehensive income (AOCI). This valuation, according to Janney, presents a significant investment opportunity, especially when considering the company's historical performance and future growth prospects.

Furthermore, Everest's commitment to shareholder returns was highlighted. The company has been actively engaged in capital return initiatives, repurchasing over 1 million shares in the past year. This commitment was further solidified by the authorization of a new 10 million share buyback program in late 2024. These actions demonstrate management's confidence in the company's financial strength and its dedication to enhancing shareholder value.

In conclusion, Janney's analysis suggests that Everest Group is currently undervalued relative to its performance potential. The firm believes that the recent reserve reset, coupled with strategic portfolio adjustments and a strong capital return strategy, positions Everest exceptionally well for a significant rebound and sustained growth in the coming years.