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On Feb 22, Zacks Investment Research upgraded Fidelity National Financial, Inc. (FNF - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Fidelity National has been witnessing rising earnings estimates on the back of solid fourth-quarter 2013 results. Moreover, this well-known property and casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 9.5%. The long-term expected earnings growth rate for this stock is 2%.    

Fidelity National reported fourth-quarter results on Feb 12. Non-GAAP earnings per share came in at 43 cents, surpassing the Zacks Consensus Estimate by 19.4%. However, earnings declined 40% year over year.

Nonetheless, the company witnessed a 3.2% decline in expenses year over year, attributable to lower personnel costs and other operating expenses. Fidelity National recognized an estimated $150 million in annualized synergies. It is targeting $180 million to $190 million by the end of the first quarter and at least $225 million by the end of the second quarter.

Fidelity National also targets debt-to-total-capital ratio at around 35% at the end of the first quarter.

The Zacks Consensus Estimate for earnings in 2014 increased 8.2% to $2.10 per share as half of the estimates were revised higher over the last 30 days. For 2015, 1 of 3 estimates was revised higher over the same time frame, lifting the Zacks Consensus Estimate for the year by 7.5% to $2.29 per share.

Other Stocks to Consider

Other players in the property and casualty industry that look attractive at current levels include ACE Ltd. (ACE - Analyst Report), AmTrust Financial Services, Inc, (AFSI - Snapshot Report) and RLI Corp. (RLI - Analyst Report). All these stocks carry the same Zacks Rank as Fidelity National.

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