A month has gone by since the last earnings report for Chubb (
CB Quick Quote CB - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chubb due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Chubb Q2 Earnings Top on Higher Premiums, Better Pricing Chubb reported second-quarter 2021 core operating income of $3.62 per share, which surpassed the Zacks Consensus Estimate by 22.3% on the back of improved premium revenues. The bottom line rebounded from the year-ago loss of 52 cents per share. The company’s results benefited from highest organic P&C growth in over 15 years, driven by commercial P&C businesses and supported by continued robust commercial P&C pricing. The quarter marked record core operating earnings and underwriting results. Quarter in Detail
Net premiums written climbed 14.3% year over year to $9.5 billion in the quarter. Net premiums earned improved 8.4% to $8.8 billion.
Net investment income amounted to $884 million, increased 6.9% year over year. In the second quarter, P&C underwriting income was $1.2 billion, rebounding from the year-ago loss of $0.9 billion. Chubb incurred $226 million of after-tax catastrophe losses, net of reinsurance and including reinstatement premiums in the second quarter, narrower than the year-ago loss of $1.5 billion. Combined ratio improved 2680 basis points (bps) year over year to 85.5 in the quarter under review. Segmental Update North America Commercial P&C Insurance: Net premiums written increased 15.2% from the prior-year quarter to $4.3 billion. Combined ratio improved 3420 bps to 83.1. North America Personal P&C Insurance: Net premiums written increased 2.6% from the prior-year quarter to $1.4 billion. Combined ratio improved 40 bps to 79.2. North America Agricultural Insurance: Net premiums written improved 11% year over year to $512 million. Combined ratio improved 310 bps to 90.9. Overseas General Insurance: Net premiums written advanced 23.6% from the year-ago quarter to $2.5 billion. Combined ratio improved 230 bps to 88.7. Global Reinsurance: Net premiums written increased 32.4% year over year to $274 million. Combined ratio deteriorated 1000 bps to 86.6 Life Insurance: Net premiums written dipped 0.7% year over year to $615 million. Financial Update
As of Jun 30, 2021, cash balance of $1.8 billion improved 5.5% from the figure at 2020 end.
Total shareholders’ equity increased about 1% from the level at 2020 end to $60.1 billion as of Jun 30, 2021. Book value per share as of Jun 30, 2021 was $136.90, up 3.8% from the figure as of Dec 31, 2020. Core operating return on equity (ROE) came in at 11.5% in the quarter under consideration. During the quarter, operating cash flow totaled $3.1 billion. Capital Deployment
In the quarter, the company bought back shares worth $2.27 billion including share repurchases of $1.92 billion and dividends of $352 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 5.48% due to these changes.
At this time, Chubb has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Chubb has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.