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Allied World (AWH) Q2 Earnings Beat Unlikely, Stock at Risk?
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Allied World Assurance Company Holdings, AG (AWH - Free Report) is scheduled to report second-quarter 2016 on Jul 19. Last quarter, this insurer delivered a 10.17% positive earnings surprise. Will Allied World pull off a positive earnings surprise this quarter?
Factors Influencing This Past Quarter
The second quarter witnessed several catastrophe events, which may have weighed on the underwriting results of Allied World, affecting underwriting income and combined ratio.
A low interest rate environment should have restricted significant improvement in investment results. However, yet higher returns from fixed income assets and better performance of Allied World Financial Services should have aided net investment income in the quarter.
Strategic acquisitions are likely to drive the top line. However, rates may have remained challenged. Nonetheless, focus on expense reduction should help in improving margins.
Share repurchase should boost the bottom line.
With respect to the surprise trend, Progressive surpassed expectations in two of the last four quarters. The average negative surprise was 12.82%.
The company’s share price has been on uptrend over the last few days. We wait to see how the stock reacts to the quarter’s results.
Our proven model does not conclusively show that Allied World will likely beat the Zacks Consensus Estimate in the second quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Allied World has a negative 15.91% Earnings ESP. This is because the Most Accurate estimate is pegged at 37 cents, which is below the Zacks Consensus Estimate of 44 cents per share.
Zacks Rank: Allied World has a Zacks Rank #4 (Sell). Notably, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
W.R. Berkley Corp. (WRB - Free Report) has an Earnings ESP of +4.94% and a Zacks Rank #3. The company is scheduled to release second-quarter earnings results on Jul 25.
Loews Corporation (L - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #2. The company is scheduled to release second-quarter earnings results on Aug 1.
Argo group International Holdings, Ltd. , Earnings ESP of +3.19 % and a Zacks Rank #2. The company is scheduled to report second-quarter earnings results on Aug 2.
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Allied World (AWH) Q2 Earnings Beat Unlikely, Stock at Risk?
Allied World Assurance Company Holdings, AG (AWH - Free Report) is scheduled to report second-quarter 2016 on Jul 19. Last quarter, this insurer delivered a 10.17% positive earnings surprise. Will Allied World pull off a positive earnings surprise this quarter?
Factors Influencing This Past Quarter
The second quarter witnessed several catastrophe events, which may have weighed on the underwriting results of Allied World, affecting underwriting income and combined ratio.
A low interest rate environment should have restricted significant improvement in investment results. However, yet higher returns from fixed income assets and better performance of Allied World Financial Services should have aided net investment income in the quarter.
Strategic acquisitions are likely to drive the top line. However, rates may have remained challenged. Nonetheless, focus on expense reduction should help in improving margins.
Share repurchase should boost the bottom line.
With respect to the surprise trend, Progressive surpassed expectations in two of the last four quarters. The average negative surprise was 12.82%.
The company’s share price has been on uptrend over the last few days. We wait to see how the stock reacts to the quarter’s results.
ALLIED WORLD AS Price and EPS Surprise
ALLIED WORLD AS Price and EPS Surprise | ALLIED WORLD AS Quote
Earnings Whispers
Our proven model does not conclusively show that Allied World will likely beat the Zacks Consensus Estimate in the second quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Allied World has a negative 15.91% Earnings ESP. This is because the Most Accurate estimate is pegged at 37 cents, which is below the Zacks Consensus Estimate of 44 cents per share.
Zacks Rank: Allied World has a Zacks Rank #4 (Sell). Notably, Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some companies you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
W.R. Berkley Corp. (WRB - Free Report) has an Earnings ESP of +4.94% and a Zacks Rank #3. The company is scheduled to release second-quarter earnings results on Jul 25.
Loews Corporation (L - Free Report) has an Earnings ESP of +5.00% and a Zacks Rank #2. The company is scheduled to release second-quarter earnings results on Aug 1.
Argo group International Holdings, Ltd. , Earnings ESP of +3.19 % and a Zacks Rank #2. The company is scheduled to report second-quarter earnings results on Aug 2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>