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CNA Financial (CNA): A Beat in Store this Earnings Season?
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We expect property and casualty insurer CNA Financial Corporation (CNA - Free Report) to beat expectations when it reports fourth-quarter 2016 results on Feb 6, before the market opens.
Why a Likely Positive Surprise?
Our proven model shows that CNA Financial has the right combination of two key ingredients to beat estimates this quarter.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +13.42%. This is because the Most Accurate estimate of 93 cents is higher than the Zacks Consensus Estimate of 82 cents. The positive ESP is a meaningful and leading indicator of a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CNA Financial sports a Zacks Rank #1 (Strong Buy). Note that stocks with a Zacks Rank of #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating on earnings. The combination of CNA Financial’s favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
What is Driving the Better-Than-Expected Earnings?
CNA Financial is likely to report growth in net premiums written fueled by improved retention. The company’s disciplined approach toward the market is expected to have resulted in a modest level of new business.
Moreover, the P&C insurer is likely to come up with improved results at its Specialty and International segments in the fourth quarter.
In addition, the company is anticipated to record improvement in combined ratio in spite of a tough operating environment. This represents CNA Financial’s superior underwriting discipline.
Further, the company is likely to display profitability at its Life & Group business in the to-be-reported quarter.
However, the company is expected to incur some additional severance expense in the fourth quarter owing to its efforts to simplify the organization with the dual purpose of improving the timeliness of its decision making and reducing costs.
With respect to earnings trend, the company delivered positive surprises in three of the last four quarters, but with an average negative surprise of 18.69%.
Here are some companies from the insurance industry that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Argo Group International Holdings, Ltd. has an Earnings ESP of +9.52% and a Zacks Rank #3. The company is set to report fourth-quarter earnings on Feb 13.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +1.64% and a Zacks Rank #3. The company is slated to report fourth-quarter earnings on Feb 14.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>
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CNA Financial (CNA): A Beat in Store this Earnings Season?
We expect property and casualty insurer CNA Financial Corporation (CNA - Free Report) to beat expectations when it reports fourth-quarter 2016 results on Feb 6, before the market opens.
Why a Likely Positive Surprise?
Our proven model shows that CNA Financial has the right combination of two key ingredients to beat estimates this quarter.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +13.42%. This is because the Most Accurate estimate of 93 cents is higher than the Zacks Consensus Estimate of 82 cents. The positive ESP is a meaningful and leading indicator of a likely earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: CNA Financial sports a Zacks Rank #1 (Strong Buy). Note that stocks with a Zacks Rank of #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating on earnings. The combination of CNA Financial’s favorable Zacks Rank and positive Earnings ESP makes us reasonably confident of an earnings beat.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
What is Driving the Better-Than-Expected Earnings?
CNA Financial is likely to report growth in net premiums written fueled by improved retention. The company’s disciplined approach toward the market is expected to have resulted in a modest level of new business.
Moreover, the P&C insurer is likely to come up with improved results at its Specialty and International segments in the fourth quarter.
In addition, the company is anticipated to record improvement in combined ratio in spite of a tough operating environment. This represents CNA Financial’s superior underwriting discipline.
Further, the company is likely to display profitability at its Life & Group business in the to-be-reported quarter.
However, the company is expected to incur some additional severance expense in the fourth quarter owing to its efforts to simplify the organization with the dual purpose of improving the timeliness of its decision making and reducing costs.
With respect to earnings trend, the company delivered positive surprises in three of the last four quarters, but with an average negative surprise of 18.69%.
CNA Financial Corporation Price and EPS Surprise
CNA Financial Corporation Price and EPS Surprise | CNA Financial Corporation Quote
Other Stocks to Consider
Here are some companies from the insurance industry that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
CNO Financial Group, Inc. (CNO - Free Report) , which is set to report fourth-quarter earnings on Feb 7, has an Earnings ESP of +2.56% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Argo Group International Holdings, Ltd. has an Earnings ESP of +9.52% and a Zacks Rank #3. The company is set to report fourth-quarter earnings on Feb 13.
American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +1.64% and a Zacks Rank #3. The company is slated to report fourth-quarter earnings on Feb 14.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>