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Research Alert: CFRA Maintains Strong Buy Opinion On Shares Of Arch Capital Group Ltd.
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Research Alert: CFRA Maintains Strong Buy Opinion On Shares Of Arch Capital Group Ltd.
May 7, 2026 3:36 AM

05:45 AM EDT, 05/07/2026 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month targe price to $115 from ($118), valuing ACGL shares at 10.9x our '27 operating EPS estimate of $10.55 (lowered today by $0.40) and at 11.6x our '26 EPS estimate of $9.93 (cut by $0.12), versus the shares' three-year average forward multiple and the peer average of 12x. ACGL posted Q1 operating EPS of $2.50 vs. $1.54 the prior year, beating the $2.46 consensus but missing our $2.62 estimate. However, operating revenues declined 1.3% Y/Y, significantly below our 8%-15% growth forecast, reflecting 4.8% lower earned premiums partly offset by 8% higher investment income. We view ACGL as a top-tier underwriter with superior underwriting capabilities, maintaining strong profitability metrics despite competitive headwinds. We now see revenue growth of 3%-5% in 2026 and 2027. Underlying underwriting results remained superior to industry averages, with the combined ratio at 82.3% vs. 81.0% the prior year, about 5-10 points better than industry, which will support EPS.

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