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Earnings Estimates Rising for ProAssurance (PRA): Will It Gain?

ProAssurance (PRA) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

ProAssurance (PRA) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

- Zacks

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this medical professional liability insurer, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For ProAssurance, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $0.13 per share for the current quarter, which represents a year-over-year change of +160%.

Over the last 30 days, three estimates have moved higher for ProAssurance compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 218.75%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $0.73 per share, representing a year-over-year change of +240.38%.

The revisions trend for the current year also appears quite promising for ProAssurance, with three estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 208.45%.

Favorable Zacks Rank

Thanks to promising estimate revisions, ProAssurance currently carries a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Investors have been betting on ProAssurance because of its solid estimate revisions, as evident from the stock's 19.7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away.



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