Shares in Beazley plc ($BEZ (+0.47%) ) shares rose sharply today after the company announced better-than-expected half-year results and raised its forecast for the full year.
Financial highlights and market reaction:
- Return on equity (ROE)Beazley reported an impressive 28% return on equity for the first six months of the year, well ahead of analysts' expectations. This strong performance was one of the main reasons for the share price increase.
- Higher solvency and outlookUBS Global Research analysts noted that the strength of the result and higher solvency should increase expectations for year-end distributions.
- Adjusted forecastsBeazley raised its forecast for the combined ratio for the full year from originally "below the low 80s" to around 80%. The combined ratio is an important indicator in the insurance industry that measures an insurer's profitability, with a lower figure indicating higher profitability.
Analyst comments:
- Analysts at RBC Capital Markets expressed surprise at the strength of underwriting results in all segments except Specialty. They maintained their Outperform rating for Beazley shares and raised the target price to 1,000 pence.
- Despite the positive performance, RBC analysts cautioned that the increase in the full-year forecast was unusual, particularly given the upcoming hurricane season.
Other positive developments:
- Reserves and buybacksAnother highlight for investors was the company's increased reserve confidence, which rose from 85% to 88%. In addition, Beazley announced a USD 325 million share buyback program, which is expected to be completed by the end of the year.
Overall, Beazley appears to have significantly boosted investor confidence with both a strong financial performance and positive guidance adjustments.
https://www.investing.com/news/stock-market-news/beazley-shares-skyrocket-on-strong-earnings-3561423