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:
Below please find a table outlining a discounted cash flow forecast for RLI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Rli Corp ranked in the 45th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 9.83%. The most interesting components of our discounted cash flow analysis for Rli Corp ended up being:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 96. Its equity weight surpasses that of 91.52% of free cash flow generating stocks in the Financial Services sector.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately merely 12.09% 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 49.98% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
FRFHF, MKL, SCU, BGCP, and BRO can be thought of as valuation peers to RLI, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
In this article we will take a look at whether hedge funds think RLI Corp. (NYSE:RLI) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from […]