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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
EG — frequently asked questions
Is Everest Group, Ltd. overvalued?
In our latest published analysis dated 2026-10-13, EG looks meaningfully undervalued. The price recorded at analysis is 375 USD versus our fair value of 635 USD; the high endpoint is presented separately as potential value of 1 474 USD. That implies roughly 69.5% upside to fair value at that date.
Our latest published report, analyzed 2026-10-13, gives EG a fair value of 635 USD and a potential value of 1 474 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Everest Group, Ltd.'s archetype; it is a dated research output, not a live price.
Should I buy EG now?
Our latest published rating for EG, analyzed 2026-10-13, is Strong Buy. Everest Group, Ltd. looks meaningfully undervalued at the analysis-date price of 375 USD versus fair value of 635 USD; potential value is 1 474 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for EG?
The dedicated bear-case section in our report analyzed 2026-10-13 documents Everest Group, Ltd.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is EG's rating?
Our latest published rating for EG, analyzed 2026-10-13, is Strong Buy, with a published moat assessment of 6.5/10 (Narrow). It reflects our fair value of 635 USD, the potential value of 1 474 USD, and the price recorded at analysis (375 USD).
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§1 Краткое резюмеEN
Ответ за 30 секундStrong Buy
Цена и стоимость
Цена
$374.72
Справедливая стоимость
$635.11
Потенциальная стоимость
$1,474.13
На дату
2026-10-13
Почему сценарий может сработать
Everest's biggest opportunity lies in compounding per-share intrinsic value through its strategic focus on high-margin property catastrophe and global specialty reinsurance, paired with aggressive share repurchases exceeding the $300M quarterly floor,.
Что изменит нашу оценку
Clustering of severe multi-peril natural catastrophe events exceeding annual catastrophe budgets or sudden adverse casualty reserve recognition exceeding $100M.
Everest Group is executing a decisive strategic pivot, shedding dilutive retail commercial lines to focus on high-return property catastrophe and global specialty reinsurance, creating a compelling investment opportunity at an undemanding 6.2x forward P/E multiple.
Everest Group presents an exceptional risk/reward profile as it reshapes its portfolio into a pure-play global reinsurance and specialty underwriting franchise. At a market price of $374.72 as of October 13, 2026, the stock trades at a 41.00% discount to our fundamental Fair value of $635.11, implying 69.49% upside. Shares trade at just 6.2x forward earnings and below book value per share of $398.83 as of June 30, 2026, offering substantial downside protection.4
The primary driver of intrinsic value growth is operating margin expansion unlocked by the transfer of the commercial retail insurance business to AIG. With only $250M of net unearned premium left to run off in the second half of 2026, legacy underwriting losses ($(36)M in Q2 2026) are rapidly eliminated. Group operating margins are projected to expand from 11.65% in FY2025 toward 19.2% in FY2026 and 21.5% by FY2030. Simultaneously, Core Reinsurance Treaty underwriting discipline holds attritional loss ratios in the mid-50s, limiting mid-year renewal price declines to ~10% compared to broad market declines of 15% to 20%.5
Capital return provides powerful per-share accretion. In Q2 2026, Everest repurchased 1.2M shares for $395M (an 81% quarterly payout ratio), bringing 1H 2026 repurchases to $725M. Management has established an explicit quarterly repurchase floor of $300M. This capital allocation policy is set to retire 2.0% to 3.5% of diluted shares annually, driving consensus EPS from $37.80 in FY2025 to $54.08 in FY2026 and $59.93 in FY2027,.1,5
Everest trades at a forward P/E of just 6.2x and below book value per share ($398.83 as of June 30, 2026), creating favorable asymmetry with 69.49% implied upside to Fair value of $635.11,.4
Margin Expansion via Retail Commercial Runoff
The transfer of commercial retail renewal rights to AIG leaves only $250M of unearned premium to run off in 2H 2026, eliminating legacy underwriting losses ($(36)M in Q2 2026) and driving operating margin toward 21.5%.5
Durable EPS Accretion from $300M+ Quarterly Buyback Floor
With $725M repurchased in 1H 2026 ($395M in Q2 2026 at an 81% payout ratio), management's $300M quarterly floor retires 2.0% to 3.5% of diluted shares annually, driving consensus EPS to $54.08 in FY2026 and $59.93 in FY2027,.1,5
Рекомендация дома
We assign a Strong Buy rating to Everest Group Ltd. with a Fair value of $635.11. At $374.72, the stock provides 69.49% implied upside and a 41.00% discount to fair value, supported by strong underwriting discipline in Core treaty reinsurance, a clean exit from dilutive retail commercial lines, and powerful share repurchases exceeding $300M per quarter.4,5
Обзор компании
Everest Group, Ltd. (NYSE: EG) is a Bermuda-based global underwriting leader providing property, casualty, and specialty reinsurance and insurance solutions with a 50-year operating history. The company operates through two core segments—Reinsurance Treaty and Global Wholesale & Specialty—alongside a diminishing Legacy segment encompassing its commercial retail insurance operations.
The Reinsurance Treaty segment writes property and casualty reinsurance treaties across global markets, while Global Wholesale & Specialty provides targeted specialty insurance lines. Everest is executing a definitive strategic repositioning by transferring its dilutive commercial retail insurance business to AIG, refocusing capital and underwriting capacity entirely on high-return reinsurance and specialty lines.
§2 Медвежий сценарийEN
A joint capital and underwriting stress test evaluates Everest's financial resilience under simultaneous headwinds: a 10 to 15 percentage point combined ratio surge from multi-peril catastrophe clusters, adverse casualty reserve emergence such as the $55M Baltimore Bridge development, and persistent pricing declines exceeding 15% at treaty renewals. Under this stress scenario, operating margin compresses from the modeled 19.2% toward 13.2%,. Required cost of equity spikes from 6.7148% to 8.71% as underwriting risk perception rises,. The $300M quarterly repurchase floor would be curtailed to protect statutory capital surplus, and terminal valuation multiples would derate toward 6.4x. However, Everest's $15,430M in total shareholders' equity as of June 30, 2026 and adverse development cover (ADC) structures provide balance sheet absorption capacity against insolvency.
Severe multi-peril catastrophe loss clustering and elevated severe convective storms add 10-15 percentage points to combined ratios, while social inflation forces further casualty reserve strengthening. Alternative capital influx drives property cat renewal rates down sharply at 1/1/2027,. Runoff friction in commercial retail generates unexpected trailing losses. Balance sheet capital strain forces management to suspend the $300M quarterly repurchase floor, reducing EPS growth to low single digits and derating market valuation multiples.
Как может разрушиться эта теза
Severe multi-peril catastrophe loss clustering and casualty reserve surge erodes underwriting profitability.
Severe multi-peril catastrophe loss clustering and casualty reserve surge erodes underwriting profitability. In Q2 2026, Reinsurance Treaty combined ratio reached 88.5% with 3.1% catastrophe losses. A major multi-peril catastrophe loss year adding 10-15 pp to combined ratios alongside casualty reserve strengthening would reduce operating margin by 6 pp below the modeled 19.2% to 13.2%.5
FV impact
0%
Operating margin 6 points lower throughout
Trigger
Within 12 months
Сигналы раннего предупреждения для мониторинга
Пять событий, которые ослабят наш инвестиционный тезис.
01
Treaty Attritional Loss Ratio
Treaty attritional loss ratio breaching 60.0% indicates competitive pricing erosion and loss of underwriting discipline, directly threatening the target 19.2%-21.5% operating margin.
Текущее значение:57.1% in Q2 2026 (54.4% excluding non-cat weather)
Предупреждение, если>60.0%
02
§3 Конкурентный ровEN
Narrow
Everest Group sustains a narrow economic moat grounded in underwriting scale, broker relationships, and financial strength ratings across its Core Reinsurance Treaty and Global Wholesale & Specialty franchises. Writing complex global reinsurance treaties requires multi-billion-dollar balance sheet capital, regulatory licensing across international jurisdictions, and high financial strength ratings that primary insurers require before ceding catastrophic risk. These structural attributes create barriers to entry that protect established global reinsurers from direct displacement by new entrants.
The durability of Everest's moat is demonstrated by its pricing discipline during renewal cycles. In the June 1 and July 1, 2026 renewal periods, broad market property catastrophe pricing declined 15% to 20%, yet Everest limited its portfolio price decline to approximately 10% while preserving terms and holding attachment points stable. Management achieved this by reallocating capacity toward clients offering healthy risk-adjusted returns and pulling back from underpriced business,. While peer Arch Capital demonstrates higher operating margins (26.58% in Q2 2026), Everest's core treaty attritional loss ratio in the mid-50s confirms durable underwriting discipline.
The strategic decision to transfer the commercial retail insurance business to AIG reinforces this narrow moat. Commercial retail insurance lacked moat characteristics, suffering from intense price competition and elevated expense ratios that generated a $(36)M underwriting loss in Q2 2026. Eliminating this dilutive drag frees capital to back high-return reinsurance treaties and specialty wholesale lines, driving normalized operating margins from 11.65% in FY2025 toward 21.5% by FY2030.
Экономическая прибыль
Everest generated FY2025 net income of $1,591M on total equity of $15,430M as of June 30, 2026, generating an annualized operating return on equity of 14.9% in Q2 2026. This return structure delivers clear economic profits above its moderate cost of equity of 6.7148% and computed WACC of 6.3822%. Long-term mid-cycle operating returns of 16.5% remain durable across the 5-year forecast horizon.2,6
6.5/ 10
Narrow
Sources of advantage
01Underwriting scale advantage and global treaty panel placement — Everest operates with a 50-year underwriting history and a $44,863M investment and cash portfolio as of June 30, 2026, providing the capacity required to lead tier-one global property and casualty treaty reinsurance programs. This multi-billion-dollar underwriting scale allows management to deploy capacity selectively above return hurdle rates while pulling back from commoditized treaties.Moderate
02Distribution relationships and broker switching costs — Long-standing relationships with primary global reinsurance brokers and multinational cedents create institutional switching frictions. In the mid-year 2026 renewals, Everest maintained terms, conditions, and attachment points despite broader market pricing pressure, outperforming general market rate declines by 5 to 10 percentage points.Moderate
The highlighted cell is Fair value when every assumption sits at its base level ($635.11). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $1.8B after modeled reinvestment of $204.5M, with terminal value at 88.0% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Everest executes its strategic repositioning, completing the runoff of commercial retail insurance ($250M unearned premium in 2H 2026). Core treaty attritional loss ratios hold in the mid-50s. Management maintains its $300M quarterly repurchase floor, reducing share count by 2.0%-3.5% annually. Operating margin expands to 19.2% in FY2026 and 20.5% in FY2027, driving diluted EPS to $54.08 in FY2026 and $59.93 in FY2027,.1,5
Core Reinsurance Treaty combined ratio averages 84%-86% with benign catastrophe losses5
Commercial retail transfer concludes cleanly without residual drag
§7 Дерево решений по отчётностиEN
Превышение
Maintain Strong Buy; Maintain Strong Buy rating; evaluate tactical position sizing up toward maximum portfolio allocation limit.
Триггер: Core combined ratio outperforming historical underwriting targets, treaty attritional loss ratio improving below baseline expectations, and quarterly share repurchases accelerating beyond the baseline floor.
Demonstrates sustained treaty pricing discipline, outperformance against non-cat weather losses, and accelerated capital return, reinforcing high conviction in fundamental intrinsic value.
По плану
Maintain Strong Buy; Keep existing position weight steady; monitor January renewal commentary and casualty reserve trends.
Триггер: Core combined ratio tracking within expected guidance ranges, treaty attritional loss ratio holding stable within target underwriting parameters, and share repurchases executing at the quarterly baseline floor.
Confirms base case execution with retail commercial runoff proceeding as guided ($250M in 2H 2026) and steady share retirement.
Ниже плана
Downgrade the rating; Review position sizing for potential trim; reassess catastrophe exposure budgets and reserve adequacy.
Триггер: Core combined ratio deteriorating above underwriting tolerances, treaty attritional loss ratio elevating past acceptable levels, or quarterly share repurchases curtailed below baseline expectations.
Signals loss of treaty underwriting discipline, unexpected adverse casualty reserve development, or balance sheet capital strain requiring buyback curtailment.
Качество прибыли
Earnings quality is improving as the dilutive commercial retail business is eliminated, shifting the business mix entirely toward higher-margin Core Reinsurance Treaty and Global Wholesale & Specialty segments. Underwriting income in Core businesses reached $317M in Q2 2026 (90.0% combined ratio), offset by $(36)M in Legacy runoff. Realized investment gains/losses and foreign exchange fluctuations are excluded from operating income, and reserves are proactively reinforced ($55M Baltimore Bridge charge recognized in Q2 2026).5
Динамика прогнозов
Consensus earnings estimates have stabilized following the second-quarter earnings release across FY2026 and FY2027 projections,. Post-event estimate revisions showed unchanged expectations across both fiscal periods.1
Метрики для отслеживания перед отчётом
01
Метрика:
Treaty Attritional Loss Ratio
Текущее57.1% in Q2 2026 (54.4% excluding non-cat weather); guided to remain in the mid-50s.
Почему это важно
Primary indicator of underlying treaty underwriting profitability and pricing discipline relative to inflation and claims frequency.
02
Метрика:
Quarterly Share Repurchase Pace
Текущее$395M in Q2 2026 (81% payout ratio); management guided to $300M+ ongoing floor.
Почему это важно
Direct driver of per-share EPS accretion and capital return commitment.
Cash generation reflects the working capital dynamics of a top-tier global reinsurer. Operating cash flow reached $3,068M in FY2025 and $939M in 1H 2026. The 1H 2026 operating cash flow contraction from $2,007M in 1H 2025 was driven primarily by an unearned premium decline of $788M as the commercial retail business runoff accelerated. Total investments and cash stood at $44,863M as of June 30, 2026, including $1,117M in pure cash. Non-catastrophe float and net investment income ($523M in Q2 2026) provide abundant liquidity to absorb catastrophe claims and support buybacks in excess of $300M quarterly.5,6
Распределение капитала
Everest allocates capital with a disciplined focus on shareholder return and underwriting solvency. Share repurchases represent the top strategic allocation priority, anchored by an explicit floor of $300M per quarter. Management repurchased $395M (1.2M shares at $342) in Q2 2026, translating into an 81% quarterly payout ratio, following $330M in Q1 2026. Regular dividends of $2.00 per share per quarter ($335M in FY2025) provide a steady cash return stream, while statutory capital requirements to back policyholder reserves remain fully satisfied by strong operating cash generation.
The return trajectory is improving as the dilutive commercial retail business (which generated a $(36)M underwriting loss in Q2 2026) runs off to AIG, leaving only $250M in 2H 2026 net premiums. Group operating margin expands from 11.65% in FY2025 toward 19.2% in FY2026 and 21.5% by FY2030.
Everest's annualized net operating ROE of 14.9% in Q2 2026 and modeled mid-cycle operating return of 16.5% comfortably exceed its moderate cost of equity of 6.7148% and computed WACC of 6.3822%.
FY2025 revenue was $17,496M with net income of $1,591M (9.09% net margin),. As retail commercial premiums diminish to $250M in 2H 2026, consensus projects FY2026 revenue of $12,331.86M and FY2027 revenue of $11,751.05M, while expands toward 19.2%-20.5%.
Последняя выручка17,5 млрд $CAGR выручки +13,1 %
Операционная маржа11,2 %Фискальных периодов: 10
Последний свободный денежный поток-334 млн $FY2025
Чистая денежная позиция15,9 млрд $FY2025
Структура отчёта о прибылях и убыткахКак масштаб бизнеса преобразуется в отчетную прибыль.
StockMarketAgent.AI
Выручка17,5 млрд $Себестоимость выручки−13,9 млрд $Валовая прибыль3,6 млрд $Операционные расходы−1,6 млрд $Операционная прибыль2 млрд $Внереализационные статьи и налоги−363 млн $Чистая прибыль1,6 млрд $
Данные финансовой истории
Выручка
17 496 000 000 $
Себестоимость выручки
13 942 300 000 $
Валовая прибыль
3 553 700 000 $
Операционные расходы
1 599 700 000 $
Операционная прибыль
1 954 000 000 $
Внереализационные статьи и налоги
-363 000 000 $
Чистая прибыль
1 591 000 000 $
Обзор балансаКак представлены и профинансированы заявленные активы за выбранный период.
StockMarketAgent.AI
Структура активовИсточники финансирования
Активы, всего62,5 млрд $Денежные средства1,3 млрд $Оборотные активы32,4 млрд $Обязательства, всего47,1 млрд $Краткосрочные обязательства42,5 млрд $Акционерный капитал15,5 млрд $
Данные структуры баланса
Активы, всего
62 514 000 000 $
Денежные средства
1 318 000 000 $
Оборотные активы
32 354 000 000 $
Обязательства, всего
47 054 000 000 $
Краткосрочные обязательства
42 517 000 000 $
Акционерный капитал
15 460 000 000 $
Мост денежных потоковКак операционный денежный поток превратился в свободный денежный поток в FY2025.
StockMarketAgent.AI
Сверка операционного денежного потока
Чистая прибыль1,6 млрд $Амортизация+166 млн $Компенсация акциями+61 млн $Прочие операционные корректировки+1,3 млрд $Операционный денежный поток3,1 млрд $
Сверка денежных средств на начало и конец
Денежные средства на начало1,5 млрд $Операционный денежный поток+3,1 млрд $Инвестиционный денежный поток−2,1 млрд $Финансовый денежный поток−1,2 млрд $Влияние обменного курса−28 млн $Денежные средства на конец1,3 млрд $
3,1 млрд $ − 3,4 млрд $Свободный денежный поток -334 млн $
Данные моста денежных потоков
Чистая прибыль
1 591 000 000 $
Операционный приток
3 068 000 000 $
Амортизация
166 000 000 $
Компенсация акциями
61 000 000 $
Прочие операционные корректировки
1 250 000 000 $
Операционный денежный поток
3 068 000 000 $
Доступные денежные средства
4 617 000 000 $
Денежные средства на начало
1 549 000 000 $
Инвестиционный отток
2 096 000 000 $
Финансовый отток
1 175 000 000 $
Выкуп акций
797 000 000 $
Выплаченные дивиденды
335 000 000 $
Прочая финансовая деятельность
43 000 000 $
Влияние обменного курса
28 000 000 $
Денежные средства на конец
1 318 000 000 $
Инвестиционный денежный поток
-2 096 000 000 $
Финансовый денежный поток
-1 175 000 000 $
Выручка и прибыльКак масштаб бизнеса преобразуется в отчетную прибыль.
Денежные средства и долгДоступная ликвидность относительно общей задолженности.
Генерация денежных средствОперационный денежный поток в сравнении со свободным денежным потоком.
РентабельностьДинамика валовой, операционной и чистой маржи.
Финансовые данные на конкретную дату, использованные в анализе от 2026-10-13.
Everest Group Ltd. (EG) trades at 6.2x forward earnings against a peer median of 10.0x. The comparison uses 4 peers: Arch Capital Group Ltd., Assurant Inc., Franklin Resources Inc. and Globe Life Inc., as of 2026-10-13.
§10 Отрасль и циклEN
Фаза цикла
Peak
Industry capex-to-revenue is -0.002 (-0.2%) and industry capex-to-depreciation is 0.0, reflecting negligible physical capital intensity. In global reinsurance, capital deployment is balance-sheet and capacity-led: property catastrophe pricing declined approximately 10% at mid-year 2026 renewals as alternative capital entered the market,. The cycle view is demand-led and evidence-limited regarding aggregate third-party treaty supply.5
Бычий цикл
In a hardening or sustained firm market, catastrophe losses remain within annual budgets, alternative capital is fully absorbed by rising demand, property cat rates stabilize, and Everest's Core businesses expand underwriting income while repurchases compound EPS.
Медвежий цикл
In an accelerating soft market, alternative capital floods treaty renewals, mid-year price declines of 10% deepen beyond 15%-20%, and adverse casualty development erodes underwriting margins toward industry levels of 7.2%.
Долгосрочные тренды
Тренд
Влияние
Примечание
Elevated global catastrophe loss frequency and severe convective storms
positive
Higher baseline climate volatility and weather-related secondary peril losses maintain elevated demand for global reinsurance protection, supporting elevated attachment points,.
Expanding alternative capital and insurance-linked securities (ILS)
neutral
Third-party capital growth increases market capacity and exerts downward pressure on property cat pricing, but partnership facilities allow Everest to share risk and earn fee income,.
Позиционирование
Everest is positioned at the upper tier of reinsurance underwriting profitability, pivoting capital away from dilutive retail commercial lines and toward core property catastrophe and global specialty treaties. With industry capex-to-revenue at -0.2% and industry capex-to-depreciation at 0.0, capital intensity is financial rather than physical. Everest's disciplined underwriting posture defies general market softening by maintaining mid-50s attritional loss ratios while peer Arch Capital delivers 26.58% operating margins.3,5
§11 Управление позициейEN
Размер позиции
5-7%
High conviction is supported by a 41.00% discount to fair value ($374.72 price vs. $635.11 Fair value),, an undemanding forward P/E of 6.2x, and an active $300M+ quarterly share repurchase floor,.4,5
Риск
Risk management centers on monitoring catastrophe peril aggregations, casualty loss emergence, and holding company liquidity. Position sizing is capped at 7% of total portfolio equity. Exposure to property catastrophe loss volatility is mitigated by Everest's attachment point discipline, treaty retrocession in niche lines, and structural portfolio de-risking via the AIG transaction.
Initiate primary tranche (50% of targeted allocation)
Stock trades at a 41.00% discount to Fair value ($635.11) and just 6.2x forward earnings.
$350.00 - $360.00
Add secondary tranche (30% of targeted allocation)
Accumulation level near tangible book value per share ($398.83 as of June 30, 2026), providing strong asset protection.
Below $340.00
Complete full allocation (final 20%)
Aligns with management's Q2 2026 repurchase execution average price of $342 per share.
Транши выхода
Уровень
Действие
$540.00
Trim 25% of position
$635.00
Trim 50% of position upon reaching fundamental Fair value
Квартальные контрольные точки
Метрика
Порог
Действие
Treaty Attritional Loss Ratio
>58.0%
Reassess treaty underwriting margins and examine whether soft market pricing is compromising loss performance.
Quarterly Share Repurchase Volume
<$300M
Review holding company liquidity, capital adequacy ratios, and management's capital return commitment.5
§12 Точки зрения инвесторовEN
Fundamental / Long-Term Investor
Buy
Everest is undergoing a high-return corporate transformation, divesting dilutive retail commercial insurance to focus on core global reinsurance treaties and specialty lines. Operating margin is poised to expand toward 21.5%, while capital return exceeding $300M per quarter provides durable per-share EPS compounding against an undemanding 6.2x forward P/E multiple.4,5
Tactical / Total Return Investor
Buy
Shares trade at a 41.00% discount to intrinsic Fair value ($635.11) and below book value of $398.83 per share. An 81% payout ratio in Q2 2026 with $395M in repurchases creates a robust valuation floor and favorable asymmetry.5
Risk-Conscious / Cautious Perspective
Hold
Skeptics caution that mid-year property cat renewal pricing dropped 10% amid expanding alternative capital, and social inflation continues to pressure casualty lines ($55M Baltimore Bridge reserve increase). A severe catastrophe season could curtail buybacks and compress margins toward 13.2%.5
§14 Итоговая рекомендацияEN
Действие
Активно покупать
We assign a Strong Buy rating to Everest Group with a Fair value of $635.11, representing 69.49% implied upside from the October 13, 2026 price of $374.72,. The stock trades at an exceptionally depressed valuation of 6.2x forward earnings and below book value per share of $398.83 as of June 30, 2026.4
The market is overly discounting property catastrophe pricing headwinds while ignoring the structural margin expansion unlocked by divesting dilutive retail commercial lines to AIG ($250M unearned premium in 2H 2026) and the powerful per-share accretion generated by retiring >$300M in stock each quarter,.
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Sources
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Persistent soft market across treaty renewals and alternative capital influx compresses valuation multiple.
Persistent soft market across treaty renewals and alternative capital influx compresses valuation multiple. Everest property catastrophe pricing fell 10% at mid-year renewals with market rates down 15% to 20% and alternative capital expanding. If softness persists into 1/1/27 renewals, the terminal P/E multiple derates 20% from 8.0x to 6.4x.5
FV impact
-6.8%
Terminal multiple 20% lower
Trigger
Within 18 months
Balance sheet capital depletion from major catastrophe event elevates required cost of equity.
Balance sheet capital depletion from major catastrophe event elevates required cost of equity. Moderate cost of equity is 6.7148% based on an adjusted beta of 0.3559 and raw beta of 0.2313,. A major capital depletion shock would spike risk perception and beta toward historical insurance cycle stress levels of 8.71%.2
Accelerated top-line contraction, soft market pricing, and buyback suspension trigger bear case. Under bear case conditions, commercial runoff friction accelerates, catastrophe losses exceed annual budgets, and share repurchases are halted from the $300M quarterly floor, reducing EPS growth to 2% and compressing terminal P/E to 6.0x, bringing diluted EPS below $42.00.5
FV impact
-4.8%
The analyst's bear scenario path and multiple as the base case
Trigger
Within 24 months
Quarterly Share Repurchases
Quarterly repurchases falling below $250M indicates capital depletion or heightened catastrophe losses, falsifying the buyback-driven EPS accretion thesis.
Текущее значение:$395M in Q2 2026 ($725M in 1H 2026)
Предупреждение, если<$250M per quarter
03
Commercial Retail Residual Drag
Residual commercial retail liability or runoff underwriting losses exceeding $500M in FY2027 would prevent projected net margin expansion toward 18.5%.
Текущее значение:$250M remaining in 2H 2026
Предупреждение, если>$500M lingering into FY2027
04
Property Catastrophe Renewal Rate Change
Renewal rate declines steeper than 15% would push catastrophe risk-adjusted returns below hurdle thresholds, forcing treaty volume curtailment.
Текущее значение:-10.0% at mid-year 2026 renewals
Предупреждение, если<-15.0% at 1/1/2027 renewals
05
Prior Year Reserve Development (Pre-Tax)
Unfavorable prior year reserve development exceeding $75M indicates casualty social inflation penetrating through historical reserve buffers, threatening balance sheet capital.
Текущее значение:Flat ($0M) in Q2 2026
Предупреждение, если>$75M unfavorable in a single quarter
— Top-tier financial strength ratings and extensive international insurance and reinsurance licenses are prerequisite intangible assets for writing core global reinsurance treaty lines, creating regulatory and operational barriers to entry for unrated competitors.
Moderate
Social inflation and adverse reserve development in casualty reinsurance lines.
medium
Medium term (1-3 years)
Everest executed an adverse development cover (ADC) on legacy casualty books and actively reduced casualty XOL gross written premiums by 25.0% and casualty pro-rata by 22.8% in Q2 2026.5
Execution delay and frictional expenses in commercial retail runoff to AIG.
low
Second half of 2026
Commercial retail net unearned premiums diminish rapidly to just $250M in 2H 2026, isolating legacy underwriting losses.5
Discounted forecast-period cash flows (214 $) plus discounted terminal value (1 566 $) minus signed per current share (-415,31 $) equals the 2 195 $ lens value shown above. Negative net debt is , so subtracting it raises value.
Top-line revenue contracts by ~28% in FY2026 due to the planned business exit, but earnings quality and operating profitability increase substantially.
Everest retired 1.2M shares for $395M in Q2 2026 ($342 average price, 81% payout ratio), bringing 1H 2026 repurchases to $725M. Shares outstanding declined to 38,342,734 as of October 13, 2026, down from 41,600,000 diluted average shares in FY2025.
Retiring 2.0% to 3.5% of diluted share count annually enables diluted EPS to rise from $37.80 in FY2025 to $54.08 in FY2026 and $59.93 in FY2027,.
Underwriting cash flow normalization supports capital return capacity despite working capital runoff.
Operating cash flow was $3,068M in FY2025 and $939M in 1H 2026 as unearned premiums contracted by $788M during the commercial retail runoff. Total investments and cash stood at $44,863M as of June 30, 2026.
Cash flow generation remains sufficient to cover regular dividends ($335M in FY2025) and maintain share buybacks well in excess of the $300M quarterly floor.
Маржа
EG
Everest Group Ltd.
$14.4B
6.2x
0.9x
12.6%
—
ACGL
Arch Capital Group Ltd.
$33.0B
9.9x
1.7x
6.1x
19.9%
26.6%
AIZ
Assurant Inc.
$13.4B
11.6x
1.0x
7.7x
18.3%
11.7%
BEN
Franklin Resources Inc.
$15.8B
9.9x
1.7x
11.0x
7.9%
13.0%
GL
Globe Life Inc.
$12.8B
10.1x
2.1x
9.3x
20.9%
24.6%
Social inflation driving litigation costs and casualty severity
negative
Litigation trends and larger jury verdicts increase severity across casualty lines, requiring conservative casualty reserve setting and legacy reinsurance structures,.
Commercial Retail Unearned Premium Runoff
>$300M remaining at year-end 2026
Investigate transaction friction with AIG and determine potential ongoing underwriting loss exposure.5
Prior Year Reserve Development (Pre-Tax)
Net unfavorable development exceeding $75M in a single quarter
Audit casualty loss emergence and determine whether additional adverse development cover (ADC) protection is required.5
