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Can Torchmark (TMK) Pull a Surprise this Earnings Season?
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Torchmark Corporation is scheduled to report third-quarter 2016 results after the closing bell on Oct 25. Last quarter, this company delivered a 0.91% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing this Past Quarter
Torchmark is likely to have witnessed improvement in premiums owing to better performance by the American Income Exclusive Agency. Riding on higher agent count, life sales are likely to have increased.
The Global Life is expected to have benefitted from low competition. Also, contribution from the Family Heritage Life Insurance Company is likely to have improved Health sales in the to-be-reported quarter. Continued share buyback is another positive and should support the bottom line.
However, the insurer likely has witnessed higher administrative expenses, which might weigh both on margin expansion and the bottom line. Part D will continue to remain a drag on excess investment income. Moreover, low interest rate environment is expected to hurt portfolio yield, thereby putting pressure on excess investment income.
With respect to the surprise trend, Torchmark surpassed expectations in three of the last four quarters with an average beat of 0.70%.
The company’s share price has been fluctuating over the last few days. We wait to see how the stock performs after the quarterly result announcement.
Earnings Whispers
Our proven model does not conclusively show that Torchmark will beat the Zacks Consensus Estimate in the third quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Torchmark has 0.00% Earnings ESP. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.12 per share.
Zacks Rank: Torchmark has a Zacks Rank #3, which increases the predictive power of ESP. However, a 0.00% Earnings ESP makes surprise prediction difficult.
The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some insurers you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Chubb Limited (CB - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank #3. The company is likely to report third-quarter earnings results on Oct 25.
Principal Financial Group Inc. (PFG - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #3. The company is slated to report third-quarter earnings results on Oct 27.
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Can Torchmark (TMK) Pull a Surprise this Earnings Season?
Torchmark Corporation is scheduled to report third-quarter 2016 results after the closing bell on Oct 25. Last quarter, this company delivered a 0.91% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing this Past Quarter
Torchmark is likely to have witnessed improvement in premiums owing to better performance by the American Income Exclusive Agency. Riding on higher agent count, life sales are likely to have increased.
The Global Life is expected to have benefitted from low competition. Also, contribution from the Family Heritage Life Insurance Company is likely to have improved Health sales in the to-be-reported quarter. Continued share buyback is another positive and should support the bottom line.
However, the insurer likely has witnessed higher administrative expenses, which might weigh both on margin expansion and the bottom line. Part D will continue to remain a drag on excess investment income. Moreover, low interest rate environment is expected to hurt portfolio yield, thereby putting pressure on excess investment income.
With respect to the surprise trend, Torchmark surpassed expectations in three of the last four quarters with an average beat of 0.70%.
TORCHMARK CORP Price and EPS Surprise
TORCHMARK CORP Price and EPS Surprise | TORCHMARK CORP Quote
The company’s share price has been fluctuating over the last few days. We wait to see how the stock performs after the quarterly result announcement.
Earnings Whispers
Our proven model does not conclusively show that Torchmark will beat the Zacks Consensus Estimate in the third quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: Torchmark has 0.00% Earnings ESP. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.12 per share.
Zacks Rank: Torchmark has a Zacks Rank #3, which increases the predictive power of ESP. However, a 0.00% Earnings ESP makes surprise prediction difficult.
The Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some insurers you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Everest Re Limited has an Earnings ESP of +2.41% and a Zacks Rank #2. The company is set to report third-quarter earnings results on Oct 24. You can see the complete list of today’s Zacks #1 Rank stocks here..
Chubb Limited (CB - Free Report) has an Earnings ESP of +1.52% and a Zacks Rank #3. The company is likely to report third-quarter earnings results on Oct 25.
Principal Financial Group Inc. (PFG - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #3. The company is slated to report third-quarter earnings results on Oct 27.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>