The market expects Reinsurance Group (RGA) to show higher earnings this quarter compared to last year, thanks to increased revenues, according to a Zacks.com report. This consensus outlook is crucial in assessing the company's earnings picture. One factor that could affect its near-term stock price is how the results match with the estimates.
The earnings report is expected on Aug. 1. It could help the stock move higher if the numbers exceed expectations – while a miss could move the stock lower.
Management's discussion of business conditions during the earnings call will influence whether any immediate price changes and future earnings expectations hold up. However, it's also useful to gauge the chances of a positive earnings surprise, Zacks.com reported.
This reinsurance company is expected to post quarterly earnings of $4.94 per share in its upcoming report, representing a year-over-year change of +12.3%. Meanwhile, revenues are expected to be $4.92 billion, up 14.9% from the year-ago quarter.
The consensus EPS estimate for the quarter has been increased by 0.16% over the past 30 days. This shows how analysts have updated their forecasts during this time.
Investors should keep in mind that this overall change might not represent how each individual analyst has adjusted their estimates.
Revisions to earnings estimates before a company's release could provide insights into the current business conditions.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. It's an update of the consensus estimate that reflects the latest information from analysts. This is done because analysts who update their estimates close to the earnings release may have more current insights.
A positive or negative Earnings ESP reading suggests how actual earnings could differ from the consensus estimate.
A positive Earnings ESP is likely hinting at a strong possibility of an earnings beat, especially when paired with a Zacks Rank #1 (Strong Buy), #2 (Buy), or #3 (Hold). Research shows that stocks with this combination experience a positive surprise about 70% of the time. A strong Zacks Rank increases the predictive power of Earnings ESP.
Meanwhile, a negative Earnings ESP does not guarantee an earnings miss. It is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
Reinsurance Group's Most Accurate Estimate is above the Zacks Consensus Estimate. This shows an increased analyst optimism and a +2.81% Earnings ESP. Combined with Zacks Rank of #1 (Strong Buy), this suggests that Reinsurance Group is likely to exceed the consensus EPS estimate.
