Reinsurance Group of America, Incorporated (NYSE:RGA) Analysts Adjust Price Targets

• The consensus price target for RGA has been on a downward trend, indicating analysts' adjusted expectations.
• RGA's recent earnings report showed a quarterly EPS of $4.99, missing the Zacks Consensus Estimate.
• Changes in the reinsurance industry and company performance influence analysts' price targets, with RGA's price-to-earnings ratio at 8.5X.

Reinsurance Group of America, Incorporated (NYSE:RGA) is a prominent player in the reinsurance industry, providing life and health reinsurance services globally. The company competes with other major insurers like Arthur J. Gallagher & Co. (AJG) and American International Group, Inc. (AIG). RGA's stock has been under scrutiny, with analysts adjusting their price targets based on various factors.

The consensus price target for RGA has seen a downward trend over the past year. Last month, the average price target was $216, down from $220 last quarter, and significantly lower than $232.67 a year ago. This decline suggests that analysts have adjusted their expectations, possibly due to market conditions or company performance.

Earnings reports play a crucial role in shaping analysts' price targets. RGA's recent earnings report showed a quarterly earnings per share (EPS) of $4.99, which was below the Zacks Consensus Estimate of $5.24. Despite this miss, the earnings improved from the previous year's $4.73 per share, as highlighted by Zacks. Such results can lead to adjustments in price targets.

Industry trends also impact analysts' outlooks. Changes in the reinsurance industry, such as regulatory shifts or demand fluctuations, can influence price targets. RGA's recovery post-pandemic, with earnings tripling, indicates resilience, but its price-to-earnings ratio of 8.5X suggests it may not be undervalued, as noted by analysts.

Company announcements, like strategic moves or new product launches, can also affect price targets. RGA's upcoming first-quarter earnings report on May 1 is anticipated to show a decline, as it lacks the optimal factors for an earnings beat. Analyst Thomas Gallagher from Evercore ISI has set a price target of $167, reflecting his expectations for the company's future performance.

UBS downgraded Reinsurance Group of America (NYSE:RGA) from Buy to Neutral, setting a price target of $216. The downgrade reflects growing concerns that short-term upside may be limited, even as the company aggressively pursues long-term growth.

While UBS acknowledges that RGA’s management is targeting 8–10% annual EPS growth through 2027 by deploying $1.5 billion in capital, this ambitious strategy introduces new layers of execution risk for a company historically recognized for its conservative approach. Much of that deployment — including sidecar partnerships and non-debt financing — is already baked into consensus forecasts, leading analysts to believe near-term returns are largely accounted for.

RGA’s push to capture global reinsurance opportunities is seen as a bold strategic pivot, and UBS doesn’t doubt the company’s ability to hit its targets. However, the reliance on third-party capital and large-scale deals like its recent transaction with EQH could mark a shift from opportunistic growth to growth driven by internal targets, which UBS views as a red flag for risk-conscious investors.

While the long-term fundamentals remain solid, UBS sees the current valuation and the execution demands of RGA’s capital plan as factors that warrant a more cautious stance in the near term.

UBS downgraded Reinsurance Group of America (NYSE:RGA) from Buy to Neutral, setting a price target of $216. The downgrade reflects growing concerns that short-term upside may be limited, even as the company aggressively pursues long-term growth.

While UBS acknowledges that RGA’s management is targeting 8–10% annual EPS growth through 2027 by deploying $1.5 billion in capital, this ambitious strategy introduces new layers of execution risk for a company historically recognized for its conservative approach. Much of that deployment — including sidecar partnerships and non-debt financing — is already baked into consensus forecasts, leading analysts to believe near-term returns are largely accounted for.

RGA’s push to capture global reinsurance opportunities is seen as a bold strategic pivot, and UBS doesn’t doubt the company’s ability to hit its targets. However, the reliance on third-party capital and large-scale deals like its recent transaction with EQH could mark a shift from opportunistic growth to growth driven by internal targets, which UBS views as a red flag for risk-conscious investors.

While the long-term fundamentals remain solid, UBS sees the current valuation and the execution demands of RGA’s capital plan as factors that warrant a more cautious stance in the near term.