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Can XL Group (XL) Pull a Surprise this Earnings Season?
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XL Group Ltd is set to report third-quarter 2016 results on Oct 26, after the market closes. Last quarter, the company posted a positive earnings surprise of 60.87%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
XL Group is likely to display top-line growth in the to-be-reported quarter on the back of higher net premiums earned, strong international exposure and diversified product offerings. Strategic acquisitions should also contribute to the results.
Moreover, continued share buyback should aid the company’s bottom line.
However, the company is likely to witness a decline in net investment income owing to lower reinvestment rates. Also, the P&C insurer is expected to have incurred an increase in operating expenses, which in turn, might restrict operating margin.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 1.35%.
Our proven model does not conclusively show that XL Group is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: XL Group has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents.
Zacks Rank: XL Group carries a Zacks Rank #3.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the same space that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3. The company is set to report third-quarter earnings on Nov 1.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 2.
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Can XL Group (XL) Pull a Surprise this Earnings Season?
XL Group Ltd is set to report third-quarter 2016 results on Oct 26, after the market closes. Last quarter, the company posted a positive earnings surprise of 60.87%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
XL Group is likely to display top-line growth in the to-be-reported quarter on the back of higher net premiums earned, strong international exposure and diversified product offerings. Strategic acquisitions should also contribute to the results.
Moreover, continued share buyback should aid the company’s bottom line.
However, the company is likely to witness a decline in net investment income owing to lower reinvestment rates. Also, the P&C insurer is expected to have incurred an increase in operating expenses, which in turn, might restrict operating margin.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 1.35%.
XL GROUP LTD Price and EPS Surprise
XL GROUP LTD Price and EPS Surprise | XL GROUP LTD Quote
Earnings Whispers
Our proven model does not conclusively show that XL Group is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: XL Group has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 42 cents.
Zacks Rank: XL Group carries a Zacks Rank #3.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies from the same space that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
CNA Financial Corporation (CNA - Free Report) , which is slated to report third-quarter earnings on Oct 31, has an Earnings ESP of +2.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
RenaissanceRe Holdings Ltd. (RNR - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3. The company is set to report third-quarter earnings on Nov 1.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 2.
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>>