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Earnings Estimates Moving Higher for Old Republic (ORI): Time to Buy?

Zacks Equity Research
·2-min read

Investors might want to bet on Old Republic International (ORI), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The upward trend in estimate revisions for this insurance underwriter reflects growing optimism of analysts on its earnings prospects, which 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. This insight is at the core of our stock rating tool -- the Zacks Rank.

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 Old Republic, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

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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 $0.50 per share for the current quarter, which represents a year-over-year change of -20.63%.

Over the last 30 days, the Zacks Consensus Estimate for Old Republic has increased 11.11% because one estimate has moved higher compared to no negative revisions.

Current-Year Estimate Revisions

The company is expected to earn $2.20 per share for the full year, which represents a change of -21.15% from the prior-year number.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Old Republic. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 7.32%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Old Republic currently carries a Zacks Rank #1 (Strong 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

While strong estimate revisions for Old Republic have attracted decent investments and pushed the stock 9.2% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.

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Old Republic International Corporation (ORI) : Free Stock Analysis Report

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Zacks Investment Research