Wells Fargo has revised its price target for W. R. Berkley (WRB, Financial), lowering it from $71 to $68, while maintaining an Equal Weight rating on the stock. Despite this adjustment, the company reported earnings per share (EPS) of $1.05, surpassing both the firm's prediction of $1.04 and the Street’s estimate of $1.03, primarily due to robust investment income.
However, Wells Fargo pointed out that premium growth did not meet expectations and profit margins were pressured by increased catastrophe-related claims and expenses.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for WR Berkley Corp (WRB, Financial) is $72.53 with a high estimate of $86.00 and a low estimate of $52.47. The average target implies an upside of 6.98% from the current price of $67.80. More detailed estimate data can be found on the WR Berkley Corp (WRB) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, WR Berkley Corp's (WRB, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for WR Berkley Corp (WRB, Financial) in one year is $68.92, suggesting a upside of 1.65% from the current price of $67.8. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the WR Berkley Corp (WRB) Summary page.
WRB Key Business Developments
Release Date: July 21, 2025
- Net Income per Diluted Share: Increased 8.7% to $1 per share or $401 million.
- Annualized Return on Equity: 19.1%.
- Operating Earnings: $420 million or $1.05 per share, with a 20% annualized return on equity.
- Combined Ratio: Current accident year combined ratio before cat losses was 88.4%; calendar year combined ratio was 91.6%.
- Underwriting Income: $261 million.
- Catastrophe Losses: $99 million in Q2 2025.
- Net Premiums Earned: Record $3.1 billion.
- Net Premiums Written: Record $3.4 billion.
- Net Investment Income: Record $379 million.
- Investment Income from Fixed Maturity Securities: Improved 16.5% year over year.
- Effective Tax Rate: 23.2%.
- Stockholders' Equity: Increased by $380 million to $9.3 billion.
- Cash and Cash Equivalents: More than $2 billion.
- Financial Leverage: 23.4%.
- Growth in Book Value per Share: 6.8% in the quarter and 14.3% year-to-date.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WR Berkley Corp (WRB, Financial) reported a strong performance in both underwriting income and net investment income for the second quarter of 2025.
- Net income per diluted share increased by 8.7% over the prior year, reaching $1 per share, with an annualized return on beginning of year equity of 19.1%.
- Operating earnings were $420 million or $1.05 per share, yielding an annualized return on beginning of year equity of 20%.
- Net premiums written increased to a record $3.4 billion in the quarter, with growth in all lines of business in both segments.
- Record net investment income of $379 million was achieved, benefiting from ongoing growth in invested assets and favorable new money rates on fixed maturity securities.
Negative Points
- Catastrophe losses were $99 million in the second quarter of 2025, slightly higher than the $90 million reported in the prior year's quarter.
- The property insurance market is becoming more competitive, particularly for larger accounts, which may impact future growth.
- Foreign currency losses amounted to $55 million in the quarter due to the weakening US dollar relative to other currencies.
- The effective tax rate was 23.2%, exceeding the US statutory rate due to taxes on foreign earnings at higher rates and state income taxes.
- The reinsurance marketplace is showing signs of eroding discipline, particularly in casualty lines, which could affect future profitability.
