Arch Capital Group Ltd. provides property, casualty, and mortgage insurance and reinsurance products worldwide. The Company operates in two underwriting segments: insurance and reinsurance and mortgage. The company was founded in 1995 and is based in Pembroke, Bermuda.
ACGL Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Arch Capital Group Ltd with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Arch Capital Group Ltd ranked in the 74th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Arch Capital Group Ltd ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 12.82; that's higher than 71.58% of US stocks in the Financial Services sector that have positive free cash flow.
ACGL's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 26.34% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
WRLD, UIHC, MVC, MCY, and CPTA can be thought of as valuation peers to ACGL, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
PEMBROKE, Bermuda--(BUSINESS WIRE)--Arch Capital Group Ltd. (NASDAQ: ACGL) announces its 2020 second quarter results. The results included: Net income available to Arch common shareholders of $288.4 million, or $0.71 per share, a 10.6% annualized return on average common equity, compared to $458.6 million, or $1.12 per share, for the 2019 second quarter; After-tax operating income available to Arch common shareholders(1) of $16.6 million, or $0.04 per share, a 0.6% annualized return on average
Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Arch Capital Group Ltd. New York, July 29, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Arch Capital Group Ltd. and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers.
Arch Capital Group Ltd. has estimated a range of pre-tax catastrophe losses of $205 million to $225 million in the second quarter of 2020 across its property casualty insurance and reinsurance segments. Included in these estimates is a range of …