Zacks Upgrades Montpelier To “Outperform”
Analysts at Zacks upgraded Bermuda-based Montpelier Re Holdings Ltd. to Outperform from Neutral. Zacks said Montpelier remains well positioned to deliver solid numbers going forward, given its increased exposure in the property catastrophe lines of business.
In addition, focusing on underwriting operations, augmenting capital flexibility, and strengthening its competitive position augur well for the company in the future. Property and casualty insurer Montpelier presently carries a Zacks Rank #1 [Strong Buy].
Zacks analysts said: Montpelier has been continuously experiencing upward revisions in estimates. Over the last 30 days, two of five estimates were revised upward, pushing the Zacks Consensus Estimate for 2013 to $2.60 by 5.3 percent. For 2014, one of five estimates moved north, pushing the Zacks Consensus Estimate to $2.60, up 2 percent over the same time frame.
“Montpelier has expanded its underwriting reach beyond Bermuda. It has transformed from a Bermuda ‘monoline’ property catastrophe reinsurer to a global diversified catastrophe specialist. The company benefits from tax exemptions in Bermuda as no income taxes are levied there.
“Gross insurance and reinsurance premiums written continue to exhibit an uptrend. Favorable performances at Montpelier Bermuda and Montpelier Syndicate 5151 continue to drive the upside. Additionally, the company also prudently manages risks by diversifying across geographies. Management expects a 1% to 5% increase in net written premiums for the first quarter of 2013.”
Zacks concluded: “With respect to earnings trend, Montpelier delivered positive earnings surprise in all four quarters of 2012 with an average beat of 44.7 percent. Our proven model shows that the investment manager is likely to beat earnings in the first quarter of 2013 because it has a right combination of a positive Earnings ESP and Zacks Rank. ESP or Expected Surprise Prediction — which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate — is at +5.81 percent.”
Montpelier Re operates from offices at Montpelier House on Pitts Bay Road.
