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Is Cincinnati Financial (CINF) Likely to Beat on Q2 Earnings?

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Cincinnati Financial Corporation (CINF - Free Report) is slated to report second-quarter 2021 results on Jul 28, after market close. The company delivered an earnings surprise of 30.48% in the last reported quarter.

Factors to Consider   

Strong renewal premiums, price increases, premium growth initiatives and increased exposure are likely to have aided premiums in the to-be-reported quarter. The Zacks Consensus Estimate for premiums earned is pegged at $1.5 billion, indicating an increase of 3.4% from the year-ago reported figure.

Despite a still low interest rate environment, strong cash flow from operating activities is estimated to have aided investment income.

Given the improving excess and surplus lines market, Excess and surplus lines segment is likely to have recorded an improved performance on the back of renewal price increases.

Better pricing in the reinsurance market is likely to have aided improvement in Cincinnati Re’s premium.

A benign catastrophe environment, segmentation of business risk, retention of more profitable accounts and getting better pricing on less profitable business are likely to have aided better underwriting performance in the to-be-reported quarter. The consensus estimate for combined ratio at the Insurance segment is pegged at 94, an improvement of 900 basis points from the year-ago reported quarter.

Total benefits and expenses are likely to have increased mainly due to higher underwriting, acquisition and insurance expenses, interest expense. This, in turn, might have weighed on operating margin.

Share buybacks are likely to have provided an additional upside to the bottom line.  The Zacks Consensus Estimate for second-quarter 2021 earnings per share is pegged at 99 cents, indicating more than twofold year-over-year increase.

The consensus estimate for revenues is pegged at $1.6 billion, indicating a decline of 1.8% from the year-ago reported figure.

What the Zacks Model Says

Our proven model predicts an earnings beat for Cincinnati Financial this time around. The is because it has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Cincinnati Financial has an Earnings ESP of +10.98%. This is because the Most Accurate Estimate of $1.10 is pegged higher than the Zacks Consensus Estimate of 99 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Cincinnati Financial currently carries a Zacks Rank of 1.

Other Stocks to Consider

Some other insurance stocks with the right combination of elements to come up with an earnings beat this time around are:

The Allstate Corporation (ALL - Free Report) presently has an Earnings ESP of +1.35% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chubb Limited (CB - Free Report) currently has an Earnings ESP of +4.00% and is a Zacks #2 Ranked stock.

Arch Capital Group (ACGL - Free Report) currently has an Earnings ESP of +11.11% and is a Zacks #3 Ranked stock.