Shares of RLI Corp. have underperformed in the past year, trading 9.6% lower than its industry, the Finance sector, and the Zacks S&P 500 composite. The stock closed at $68.40, nearly 25% below its 52-week high. It is also trading below key moving averages, suggesting a downward trend.
RLI’s valuation is higher than its industry average, with a price-to-book ratio of 3.62X. Growth projections indicate a 7.3% increase in earnings per share for 2025. The company’s return on equity is strong at 15.8%. Analysts have set an average target price of $74 per share, implying an 8.9% upside.
Factors working in RLI’s favor include product diversification, underwriting efficiency, and a profitable track record. The company has been rewarding shareholders with dividends and buybacks. With a robust balance sheet, RLI is positioned for long-term growth. However, given its premium valuation, a better entry point may be advisable.
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Source: Zacks Investment Research.
Read more at Nasdaq: RLI Lags Industry, Trades at Premium: How to Play the Stock