A.M. Best Co. reiterated the issuer credit ratings (ICR) of “bbb-” and all existing debt ratings of Montpelier Re Holdings Ltd. (MRH). The rating agency upgraded the outlook to positive from stable.
Subsequently, A.M. Best also affirmed the financial strength rating (FSR) of A- (Excellent) and ICR of “a-” of Montpelier Reinsurance Ltd. and its wholly owned subsidiary, Montpelier US Insurance Company. The outlook is raised to positive from stable.
The affirmations came on the back of Montpelier’s superior risk-adjusted capitalization, strong operating performance, diversified business profile and solid position. However, Montpelier’s exposure to catastrophe losses is a partial offset to the strength.
Based on the company’s financial flexibility, accessibility to equity and debt markets, and continued progress of newer operating platforms, A.M. Best upgraded the rating.
Montpelier reported first quarter 2011 operating loss of $1.90 per share, lower than the Zacks Consensus Estimate loss of $2.08. The loss, however, was wider than the loss of 31 cents incurred in the prior-year period. The quarter suffered largely due to huge catastrophe losses coupled with a significant increase in expense as well as lower investment income.
Over the last 7 days, none of the analysts covering the stock revised their estimates for the second quarter 2011 and fiscal year 2011. However, 2 out of 4 analysts raised the estimate for the second quarter 2011 over the past one month while 4 out of 5 analysts raised the estimate for 2011 over the last 30 days. For 2012, 1 out of 5 analysts has revised the estimate up over the last 30 days.
The Zacks Consensus Estimate for second-quarter 2011 is 73 cents per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, loss of 4 cents per share and earnings of $2.38 per share.
The quantitative Zacks #3 Rank (short-term Sell rating) for the company indicates no clear directional pressure on the stock over the near term.
Headquartered in Pembroke, Bermuda, Montpelier, through its subsidiaries in the U.S., the U.K. and Switzerland, provides customized and innovative reinsurance and insurance solutions to the global market. It competes with RenaissanceRe Holdings Ltd. (RNR).
MONTPELIER RE (MRH): Free Stock Analysis Report
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