Arch Capital Group Ltd. ACGL is expected to register a decline in both top and bottom lines when it reports third-quarter 2026 results on Oct. 27, after the closing bell.
The Zacks Consensus Estimate for ACGL’s third-quarter revenues is pegged at $4.46 billion, indicating a 5.5% decline from the year-ago reported figure.
The consensus estimate for earnings is pegged at $2.05 per share. The Zacks Consensus Estimate for ACGL’s third-quarter earnings has moved north 9% in the past 30 days. The estimate suggests a year-over-year decline of 25.9%.
What the Zacks Model Unveils for ACGL
Our proven model predicts an earnings beat for Arch Capital this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: Arch Capital has an Earnings ESP of +11.70% at present. This is because the Most Accurate Estimate of $2.29 is pegged higher than the Zacks Consensus Estimate of $2.05. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arch Capital Group Ltd. Price and EPS Surprise
Arch Capital Group Ltd. price-eps-surprise | Arch Capital Group Ltd. Quote
Zacks Rank: Arch Capital currently carries a Zacks Rank #3.
Factors Likely to Shape Q3 Results of ACGL
Rate increases, new business opportunities and growth in existing accounts, product innovation, market expansion and strong underwriting performance, combined with strategic investments, are likely to have favored net premiums earned.
The Zacks Consensus Estimate for net premiums earned is pegged at $4 billion. We expect net premiums earned to be $3.9 billion.
The Mortgage segment is likely to have benefited from growth in international business offset by a reduction in U.S. monthly premium volume.
Net investment income is likely to have benefited from solid net cash flow from operating activities, which is expected to have increased the invested asset base. We expect net investment income to be $432.2 million. The Zacks Consensus Estimate for investment income is pegged at $430 million.
The top line is likely to have gained from improved earned premiums and higher net investment income.
Expenses are expected to have increased in the to-be-reported quarter due to higher losses and loss adjustment expenses, acquisition costs, other operating expenses, amortization of intangible assets, corporate expenses and interest expenses. We expect total expenses to be $3.8 billion.
Disciplined underwriting practices and relatively modest catastrophe-related losses are expected to have supported underwriting margins. The Zacks Consensus Estimate for the combined ratio is pegged at 89, and our estimate is pinned at 92.1.
Share buybacks are likely to have added upside to the bottom line.
Other Stocks to Consider
Here are three other P&C insurance stocks that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat:
RenaissanceRe Holdings Ltd. (RNR has an Earnings ESP of +9.02% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $9.28, indicating a year-over-year decrease of 40.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
RNR’s earnings beat estimates in each of the last four reported quarters.
The Allstate Corporation ALL has an Earnings ESP of +5.25% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $7.03, indicating a year-over-year decrease of 37.1%.
ALL’s earnings beat estimates in each of the last four reported quarters.
Everest Group, Ltd. EG has an Earnings ESP of +3.01% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $9.32, indicating a year-over-year decrease of 23.6%.
EG’s earnings beat estimates in two of the last four reported quarters and missed in the other two.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This innovative software-as-a-service firm upped its user base +22% year over year. That rate is increasing and margins are expanding as AI efficiencies take effect. Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR): Free Stock Analysis Report
The Allstate Corporation (ALL): Free Stock Analysis Report
Everest Group, Ltd. (EG): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).