RLI Corporation underwrites property and casualty insurance primarily in the United States. Its Casualty segment provides commercial and personal umbrella coverage products; and general liability products consisting of coverage for third party liability of commercial insureds, including manufacturers, contractors, apartments, real estate investment trusts, and mercantile. The company was founded in 1965 and is based in Peoria, Illinois.
RLI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Rli Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Rli Corp ranked in the 47th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. In terms of the factors that were most noteworthy in this DCF analysis for RLI, they are:
The company's balance sheet shows it gets 96% of its capital from equity, and 4% of its capital from debt. Notably, its equity weight is greater than 92.56% of US equities in the Financial Services sector yielding a positive free cash flow.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately merely 12.55% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
RLI'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 45.84% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Financial Services that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as RLI, try WLTW, HMN, PZN, BRK.B, and TIPT.
Gainers: RLI (RLI) +15%. Old Second Bancorp (OSBC) +13%. Banc of California (BANC) +9%. Texas Capital Bancshares (TCBI) +8%.Losers: 360 Finance (QFIN) -18%. LexinFintech Holdings (LX) -12%. FinVolution Group (FINV) -7%. TriState Capital Holdings (TSC) -6%. SEI Investments (SEIC) -6%....
RLI Corp. (RLI) Q2 2020 Earnings Conference Call July 23, 2020 11:00 AM ET Company Participants Jonathan Michael - Chairman & CEO Aaron Diefenthaler - Vice President, CIO & Treasurer Todd Bryant - CFO Craig Kliethermes - President & COO Conference Call Participants Matt Carletti - JMP Securities Randy Binner...
Good morning, and welcome ladies and gentlemen to the RLI Corp.'s Second Quarter Earnings Teleconference. Joining me are Jon Michael, Chairman and CEO; Craig Kliethermes, President and Chief Operating Officer; and Todd Bryant, Chief Financial Officer.