WRB - W.R. Berkley: Pricing Pressure Could Weigh On Shares (Rating Downgrade)

2024-06-05 23:00:08 ET

Summary

• W.R. Berkley's stock has gained over 40% in the past year but has dropped 10% from its March highs.
• The company's Q1 earnings beat expectations, but there are concerns about a one-off boost to investment income and potential deceleration in underwriting results.
• Management's commentary on future growth and pricing dynamics has been disappointing, leading me to downgrade the stock to a hold.

Shares of W.R. Berkley ( WRB ) have been a strong performer over the past year, gaining over 40%, though the stock has dropped about 10% from its March highs. I last covered WRB in October when I rated shares a “buy,” given my view underwriting results were improving and elevated interest rates would support earnings. Shares have surged past my $70 price target, and while they have returned a seemingly strong 20% since my recommendation, the market has gained 24%. With updated financial information, now is a good time to determine if WRB has further upside or if investors should look elsewhere for outperformance. While results have been strong, forward-looking commentary is somewhat disappointing, and I am downgrading shares to a hold....

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