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Will Cat Loss Ail Cincinnati Financial's (CINF) Q4 Earnings?
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Cincinnati Financial Corporation (CINF - Free Report) is slated to report fourth-quarter 2017 results on Feb 7 after the market closes. Last quarter, the company delivered a positive surprise of 9.43%.
Let’s see, how things are shaping up for this announcement.
Factors to be Considered This Quarter
With the occurrence of Hurricane Nate and the California wildfires during the fourth quarter, Cincinnati Financial’s underwriting results will be significantly impacted in the soon-to-be-reported period. Such catastrophe loss will not only hurt the underwriting profitability of the company but also leave a noticeable impact on the combined ratio.
Notably, the property and casualty (P&C) insurer has projected loss of not less than $1 million each, relating to the aforementioned catastrophe events.
Further, the company has possibly reported an increase in total benefits and expenses, mainly driven by higher insurance loss and contract holders’ benefits, underwriting, acquisition and insurance expenses. This in turn might restrict the P&C insurer’s operating margin expansion.
Nonetheless, Cincinnati Financial is likely to report top-line growth in the fourth quarter, fueled by higher premiums earned. This apart, a gradual improvement in insurance rates and several growth initiatives are anticipated to have contributed to this probable upside.
On the back of a rising interest rate environment, the company is estimated to have witnessed substantial growth in net investment income in the yet-to-be-reported quarter. Also, investment results are expected to have improved on higher interest and dividend income.
Earnings Whispers
Our proven model does not conclusively show that Cincinnati Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Cincinnati Financial has an Earnings ESP of -2.92%. This is because the Most Accurate estimate is pegged at 83 cents, lower than the Zacks Consensus Estimate’s 86 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Cincinnati Financial Corporation Price and EPS Surprise
Zacks Rank: Cincinnati Financial holds a Zacks Rank #2, which increases the predictive power of ESP. A company, however, needs a positive ESP to be confident about an earnings surprise. Thus, this combination leaves surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the insurance industry with the right combination of elements to exceed estimates this time around are as follows:
CNO Financial Group, Inc. (CNO - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank of 2. The company is scheduled to announce fourth-quarter earnings on Feb 13.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank #3. The company is slated to release fourth-quarter earnings on Feb 14.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Will Cat Loss Ail Cincinnati Financial's (CINF) Q4 Earnings?
Cincinnati Financial Corporation (CINF - Free Report) is slated to report fourth-quarter 2017 results on Feb 7 after the market closes. Last quarter, the company delivered a positive surprise of 9.43%.
Let’s see, how things are shaping up for this announcement.
Factors to be Considered This Quarter
With the occurrence of Hurricane Nate and the California wildfires during the fourth quarter, Cincinnati Financial’s underwriting results will be significantly impacted in the soon-to-be-reported period. Such catastrophe loss will not only hurt the underwriting profitability of the company but also leave a noticeable impact on the combined ratio.
Notably, the property and casualty (P&C) insurer has projected loss of not less than $1 million each, relating to the aforementioned catastrophe events.
Further, the company has possibly reported an increase in total benefits and expenses, mainly driven by higher insurance loss and contract holders’ benefits, underwriting, acquisition and insurance expenses. This in turn might restrict the P&C insurer’s operating margin expansion.
Nonetheless, Cincinnati Financial is likely to report top-line growth in the fourth quarter, fueled by higher premiums earned. This apart, a gradual improvement in insurance rates and several growth initiatives are anticipated to have contributed to this probable upside.
On the back of a rising interest rate environment, the company is estimated to have witnessed substantial growth in net investment income in the yet-to-be-reported quarter. Also, investment results are expected to have improved on higher interest and dividend income.
Earnings Whispers
Our proven model does not conclusively show that Cincinnati Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Cincinnati Financial has an Earnings ESP of -2.92%. This is because the Most Accurate estimate is pegged at 83 cents, lower than the Zacks Consensus Estimate’s 86 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Cincinnati Financial Corporation Price and EPS Surprise
Cincinnati Financial Corporation Price and EPS Surprise | Cincinnati Financial Corporation Quote
Zacks Rank: Cincinnati Financial holds a Zacks Rank #2, which increases the predictive power of ESP. A company, however, needs a positive ESP to be confident about an earnings surprise. Thus, this combination leaves surprise prediction inconclusive.
We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the insurance industry with the right combination of elements to exceed estimates this time around are as follows:
CNA Financial Corporation (CNA - Free Report) is set to report fourth-quarter earnings on Feb 12. The stock has an Earnings ESP of +2.75% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNO Financial Group, Inc. (CNO - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank of 2. The company is scheduled to announce fourth-quarter earnings on Feb 13.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +0.71% and a Zacks Rank #3. The company is slated to release fourth-quarter earnings on Feb 14.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>