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Arch Capital Group Ltd. (ACGL) is a Bermuda-based insurance and reinsurance company specializing in property, casualty, and mortgage insurance worth a market cap of $33.2 billion. With a global presence, Arch provides risk management solutions across diverse industries, leveraging disciplined underwriting and strong capital management. The company has built a reputation for consistent profitability and resilience, benefiting from its diversified business model and strategic acquisitions.
Shares of the leading insurance company have underperformed the broader market over the past 52 weeks. ACGL has increased 3.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.3%. In 2025, shares of ACGL are down 4.5%, lagging behind SPX’s 4% gain on a YTD basis.
In addition, ACGL has lagged behind the Financial Select Sector SPDR Fund’s (XLF) 32.5% return over the past 52 weeks and 7.2% return on a YTD basis.
On Feb. 10, Arch Capital released its fiscal fourth-quarter earnings, and its shares plummeted more than 6% in the following three trading sessions. ACGL reported adjusted earnings of $2.26 per share, which topped market expectations. The property and casualty insurer posted revenue of $4.55 billion in the period, also surpassing Street forecasts.
The company saw a 17.1% increase in net premiums written, totaling $3.8 billion, but underwriting income fell 12.6% to $625 million due to catastrophe-related losses. Book value per share rose 13% to $53.11, reflecting strong growth. Looking forward, Arch expects a 7% to 8% catastrophe load for 2025 while maintaining competitive margins.
For the current fiscal year, ending in December, analysts expect ACGL’s EPS to fall 6.9% year-over-year to $8.64. The company’s earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, two “Moderate Buys,” four “Holds,” and one “Strong Sell.”
This consensus has been relatively stable over the past months.
On Feb. 14, Morgan Stanley (MS) analyst Michael Phillips rated Arch Capital Group as “Overweight,” while reducing the price target from $115 to $110.
ACGL’s mean price target of $114.81 represents a premium of 30.2% from the prevailing price levels. The Street-high price target of $141 implies a potential upside of 59.9% from the current price levels.
