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We expect property and casualty insurer Cincinnati Financial Corp. (CINF - Analyst Report) to beat expectations when it reports third quarter 2013 results on Oct 24.
 
Why a Likely Positive Surprise? 
 
Our proven model shows that Cincinnati Financial is likely to beat earnings because it has the right combination of two key ingredients. 
 
Positive Zacks ESP: Expected Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 10.91%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
 
Zacks Rank #1 (Strong Buy): Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.  
 
The combination of Cincinnati Financial’s Zacks Rank # 1 (Strong Buy) and 10.91% ESP makes us very confident in looking for a positive earnings beat on Oct 24th. 
 
What is Driving the Better Than Expected Earnings?
 
Numerous strategic growth initiatives undertaken by Cincinnati Financial in the commercial as well as excess and surplus line of business along with a gradually improving insurance market is expected to aid earnings 
 
Management is appointing agencies and expanding product offerings to compensate the decline in businesses. 
 
Cincinnati Financial delivered positive surprises in the last four quarters with the highest surprise coming at 122% in the fourth quarter of 2012. The positive earnings surprise was driven by increase in premium and new agency appointments. 
 
Other Stocks to Consider
 
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.
 
The Hanover Insurance Group Inc. (THG - Snapshot Report), earnings ESP of +8.82% and a Zacks Rank #1 (Strong Buy).
 
Aspen Insurance Holdings Ltd. (AHL - Snapshot Report), earnings ESP of +6.25% and a Zacks Rank #2 (Buy).
 
Arch Capital Group Ltd. (ACGL - Snapshot Report), earnings ESP of +7.23% and a Zacks Rank #2 (Buy).

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