1Q26 Earnings: Northeast Catastrophe Exposure Drives Earnings Miss

研报英文原文证据摘录

1Q26 Earnings: Northeast Catastrophe Exposure Drives Earnings Miss

$17.15

The favorable reinsurance environment, driven by Florida tort reform and declining Tang. Book/Share $18.05

litigation provides a solid base for profitable underwriting margins. HRTG's geographic Price/Book 131%

diversification and strong voluntary market agency relationships give it a competitive Price/Tang.Book 124%

advantage over newer entrants that built their books primarily through Citizens take-outs. 52-Week High / Low US$31.98 / US$16.82

Avg Daily Vol (000) 317

Total Assets ($mil) 2,021

• What we Heard: The main takeaway from the quarter is that HRTG's geographic ROE 28.30%

diversification outside of Florida is enough to have a material negative impact on results Shares Out (mil) 30.7

(if it is exposed to catastrophe events in its diversified geography). Prior to the quarter Div (ann) US$0.00

we (and we think the Street) expected this quarter to look like the rest of the Florida Institutional Ownership 63.7%

writers with a beat on catastrophe losses but HRTG's exposure to northeast winter Insider Ownership 19.8%

storms resulted in 18.4 points of catastrophe losses. Management's commentary was Fiscal Year End Dec

that investors should expect the first quarter to resemble the third quarter (which is

Price Performance - 1 Year

typically the quarter hurricanes occur) in terms of catastrophe losses. Management

continues to see increased competition in commercial residential in FL but is pivoting to USD

other geographies. The company also announced a $50 million buyback program. 32

• We are lowering our EPS estimates. We are lowering our 2026E to $4.15 from $4.40. 28

We are lowering our 2027E to $4.10 from $4.50. 26

RISKS TO ACHIEVEMENT OF PT & RECOMMENDATION 22