Have you been paying attention to shares of
Chubb (? Shares have been on the move with the stock up 4% over the past month. The stock hit a new 52-week high of $214.21 in the previous session. Chubb has gained 10.2% since the start of the year compared to the -1.6% move for the Zacks Finance sector and the 14.9% return for the Zacks Insurance - Property and Casualty industry. CB Quick Quote CB - Free Report) What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 1, 2022, Chubb reported EPS of $3.81 versus consensus estimate of $3.27 while it beat the consensus revenue estimate by 2.78%.
For the current fiscal year, Chubb is expected to post earnings of $14.57 per share on $42.45 billion in revenues. This represents a 16% change in EPS on a 1.32% change in revenues. For the next fiscal year, the company is expected to earn $16.04 per share on $45.71 billion in revenues. This represents a year-over-year change of 10.07% and 7.66%, respectively.
Chubb may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Chubb has a Value Score of B. The stock's Growth and Momentum Scores are C and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 14.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 14.3X. On a trailing cash flow basis, the stock currently trades at 14.8X versus its peer group's average of 14X. Additionally, the stock has a PEG ratio of 1.46. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Chubb currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Chubb fits the bill. Thus, it seems as though Chubb shares could still be poised for more gains ahead.
How Does CB Stack Up to the Competition?
Shares of CB have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is
Heritage Insurance Holdings, Inc. (. HRTG has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of B. HRTG Quick Quote HRTG - Free Report)
Earnings were strong last quarter. Heritage Insurance Holdings, Inc. beat our consensus estimate by 127.78%, and for the current fiscal year, HRTG is expected to post earnings of $0.50 per share on revenue of $649.7 million.
Shares of Heritage Insurance Holdings, Inc. have gained 30% over the past month, and currently trade at a forward P/E of 14.3X and a P/CF of 3.29X.
The Insurance - Property and Casualty industry is in the top 22% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CB and HRTG, even beyond their own solid fundamental situation.