Zacks Investment Research upgraded shares of RLI Corp. (RLI) from NEUTRAL to OUTPERFORM on February 18, 2013, with a target price of $83.00.
We are upgrading our recommendation on RLI Corp. to Outperform from Neutral based on its focus on business expansion and an expected improvement in the rate environment. RLI Corp's fourth quarter operating earnings surpassed the Zacks Consensus Estimate, but declined over the prior-year quarter, resulting primarily from lower underwriting results. The top line surpassed the expectation as well as the year-ago level, attributable to higher premiums earned and augmentation in net realized investment gains. Given the improving pricing scenario in the insurance market supported by strong infrastructure, widened product lines and strategic acquisitions, we expect the company to perform well in the upcoming quarters. It also continues to enhance shareholder value through regular and special dividends. However, continued low interest rate environment as well as exposure to cat loss keeps us little cautious.
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