Citizens analyst Matthew Carletti confirmed a Market Perform rating for RLI Corp. (NYSE:RLI), describing the specialty insurer as "an excellent operator maintaining fair valuation in today's market." At present, RLI shares trade around $57.25, close to their 52-week low of $55.80, according to InvestingPro data.
Carletti spotlighted RLI’s distinguished history of underwriting excellence and consistent book value growth, noting a compound annual growth rate near 9% over the last ten years owing to skilled cycle navigation. Complementing this operational strength is the company’s notable achievement of 50 consecutive years of dividend payments.
The analyst highlighted RLI's management strategy, which actively seizes opportunities during hard market periods within select Casualty lines, while adopting a conservative approach in softening markets, such as recently seen in the Property segment.
Despite acknowledging that RLI’s shares merit premium valuation compared to peers, Citizens deems the current multiples appropriate. The stock exchanges hands at roughly 3.0 times book value and 19 times estimated earnings per share for 2026, higher than peer medians of 2.5 times book value and 14 times 2026 EPS.
The firm also noted that RLI’s expected return on equity (ROE) for 2026 stands at 15%, below the peer median of 18%, justifying the Market Perform stance despite solid operational metrics. Current ROE is reported at 24%, with a Financial Health score categorized as "GOOD." Furthermore, InvestingPro’s Fair Value evaluation suggests RLI may presently be undervalued, providing additional insights via subscriber-exclusive ProTips.
RLI recently reported its fourth-quarter earnings for 2025, posting earnings per share of $0.94, which surpassed analyst predictions of $0.79 by nearly 19%. However, revenue for the quarter was $463.24 million, falling short of the expected $474.66 million. Additionally, Jefferies upgraded RLI’s stock rating from Underperform to Hold, citing a marked reduction in valuation. The price-to-book ratio contracted to approximately 2.8 times from levels exceeding 4.0 times a year prior. These results reflect evolving financial dynamics around RLI, highlighting earnings resilience alongside valuation adjustment.