Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

We are downgrading our recommendation on Cincinnati Financial Corp. (CINF - Analyst Report) to Neutral from Outperform, reflecting our concern regarding potential first-quarter earnings drain due to weather-related losses. Cincinnati Financial currently carries a Zacks Rank #3 (Hold).

Why the Downgrade?

We are concerned with weather losses that are expected to adversely affect Cincinnati Financial’s first-quarter 2014 results. Two winter storms in the first week of Jan 2014 will cost an estimated $65 million to $85 million in catastrophe losses in the company’s property casualty segments.

Moreover, low interest rates expected to continue for some time now, might adversely affect investment income – an important component of Cincinnati Financial’s revenues and net income. The company has also experienced investment portfolio problems as a result of equity investments, which constituted a significant portion of its portfolio.

While weather conditions have always rendered the company’s financial results volatile, we believe efficient execution of Cincinnati Financial’s strategic initiatives will continue to generate returns over time.

Last week, Cincinnati Financial reported fourth-quarter 2013 operating earnings of 72 cents per share, exceeding the Zacks Consensus Estimate of 69 cents. Earnings, however, declined 35% year over year.

The earnings beat came on the back of increased premium income and strong contribution from all of the company’s Personal, Commercial as well as Excess and Surplus lines.

Other Stocks to Consider

Better-ranked property and casualty insurers like Greenlight Capital Re, Ltd. (GLRE - Snapshot Report), Navigators Group Inc. (NAVG - Snapshot Report) and RLI Corp. (RLI - Analyst Report), all with a Zacks Rank #1 (Strong Buy), are worth considering.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%