Beazley share price dropped after earnings: Don’t buy the dip yet

September 07, 2023 07:23 PM AEST | By Invezz

Beazley share price dropped after earnings: Don’t buy the dip yet — Image source: Invezz

Beazley’s mixed earnings

Beazley, one of the leading insurance companies in the UK, published strong financial results on Thursday. Its profit before tax jumped to $366.4 million in the first half of the year as the written premiums jumped to $2,921 billion.

While most of the business did well during the first half, its insurance service revenue dropped by 37% to $342 million. The main reason why the stock retreated was the increase of the combined ratio. Undiscounted combined ratio rose to 88% while the discounted one rose to 84%. In a statement, the company’s CEO, Adrian Cox said:

“We have had a successful first half of the year, achieving record profits of $366.4m. Key highlights include significant growth in our North American property business and momentum in cyber across Europe. Our platform strategy and capital position have been important drivers in delivering our ambitious growth targets.”

Beazley is seeing robust demand for its products rise in the past few months as risks rose. For example, the ongoing tensions between western countries and Russia and China has led to more demand for cybersecurity insurance by companies and other organizations.

Beazley’s other businesses are specialty risks, MAP risks, property risks, and digital risks. Most of these divisions are seeing strong demand, which has helped it do well in the past few quarters.

Beazley, which re-entered the FTSE 100 this year, is attempting to move on after the company’s financial error earlier this year. FT was the first one to note that there was an error in the number of shares used to calculate its profits were wrong. It had used the weighted average share count instead of the closing stocks.

Beazley share price forecast

In my last article on Beazley, I warned that the stock would have a bearish breakout after the death cross pattern happened. This view was correct as the shares have dropped by more than 14% since then.

The stock is trading at the important support at 504p, which was the lowest level on March 20th and August 8th. It has also dropped below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) dropped to the oversold level of 30.

Therefore, the path of the least resistance for the shares is bearish, with the next support level being at 450p.

The post Beazley share price dropped after earnings: Don’t buy the dip yet appeared first on Invezz.

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