We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is a Beat in Store for Hartford Financial (HIG) in Q4 Earnings?
Read MoreHide Full Article
The Hartford Financial Services Group, Inc. (HIG - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 1, 2024, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for Hartford Financial’s fourth-quarter earnings per share is pegged at $2.39, which indicates an improvement of 3.5% from the prior-year quarter’s reported figure. The consensus mark for revenues is $4.3 billion, suggesting 7.4% growth from the year-ago quarter’s reported number.
Hartford Financial’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 10.8%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
Our proven model predicts an earnings beat for Hartford Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Hartford Financial has an Earnings ESP of +0.54% because the Most Accurate Estimate of $2.41 is pegged higher than the Zacks Consensus Estimate of $2.39. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HIG carries a Zacks Rank of 3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at HIG’s third-quarter performance.
Q3 Earnings Rewind
In the third quarter of 2023, adjusted operating earnings of $2.29 per share outpaced the Zacks Consensus Estimate by 17.4%. The quarterly results benefited from the Commercial Lines unit, which benefited on the back of higher premiums written and the Group Benefits business, which gained from improved fully insured ongoing premiums and sound core earnings margin. However, the upside was partly offset by an increased expense level and poor performance in the Hartford Funds segment.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
Factors at Play
Hartford Financial’s revenues are expected to have benefited due to improved premiums across its Commercial Lines, Personal Lines and Group Benefits businesses in the fourth quarter. Our estimate for overall earned premiums is $5,351.4 million, which indicates an improvement of 6.6% year over year.
Persistent rate increases, new business growth, expanding policies in force and higher retention rates are expected to have benefited the Commercial Lines business in the to-be-reported quarter. However, the upside is likely to have been partly offset by the continued incidence of catastrophe losses, which, in turn, are expected to have inflicted some adversities on the underwriting results. We anticipate Commercial Lines’ earned premiums to improve 7.4% year over year to $2,972.5 million in the fourth quarter.
The Personal Lines business is expected to have benefited on the back of renewal written price increases in the fourth quarter. The homeowners’ insurance business is likely to have been aided by favorable net rates and insured value increases. However, the auto insurance business is likely to have suffered a setback from elevated severity losses and the continued inflationary headwinds.
We expect earned premiums of the Personal Lines unit to be $792.8 million, which implies a 5.1% rise from the prior-year quarter’s reported number.
The Group Benefits business is expected to have been driven by higher premiums, solid sales and improved long-term disability results in the to-be-reported quarter. Our estimate for earned premiums of the segment is $1,586.2 million, which indicates an improvement of 5.9% from the prior-year quarter’s reported figure.
Additionally, increased returns from the fixed-income portfolio of Hartford Financial, attributable to higher interest rates, are likely to have aided its fourth-quarter investment results. We expect net investment income to be $697.6 million, up 9% year over year.
However, its bottom line is expected to have suffered a blow due to escalating benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. We expect total benefits, losses and expenses to increase 2.8% year over year to $5,431.1 million in the fourth quarter. HIG’s margins are also likely to have been hurt by expenses linked with investments to boost digital, analytics and data science capabilities.
Other Stocks to Consider
Here are some other companies from the broader Finance space, which, according to our model, also have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for Coinbase’s bottom line for the to-be-reported quarter suggests a 95.9% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 63%.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.18% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for EG’s fourth-quarter 2023 earnings is pegged at $14.63 per share, which indicates an increase of 19.8% from the prior-year quarter’s reported figure.
Everest Group’s earnings beat estimates in three of the trailing four quarters, missing once, the average surprise being 24.5%.
Brookfield Asset Management Ltd. (BAM - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Brookfield Asset Management’s bottom line for the to-be-reported quarter indicates 9.7% growth from the year-ago period. BAM beat earnings estimates twice in the past four quarters and missed on the other two occasions, with an average surprise of 0.2%.
Image: Bigstock
Is a Beat in Store for Hartford Financial (HIG) in Q4 Earnings?
The Hartford Financial Services Group, Inc. (HIG - Free Report) is scheduled to release fourth-quarter 2023 results on Feb 1, 2024, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for Hartford Financial’s fourth-quarter earnings per share is pegged at $2.39, which indicates an improvement of 3.5% from the prior-year quarter’s reported figure. The consensus mark for revenues is $4.3 billion, suggesting 7.4% growth from the year-ago quarter’s reported number.
Hartford Financial’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 10.8%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
The Hartford Financial Services Group, Inc. price-eps-surprise | The Hartford Financial Services Group, Inc. Quote
What Our Quantitative Model Unveils
Our proven model predicts an earnings beat for Hartford Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Hartford Financial has an Earnings ESP of +0.54% because the Most Accurate Estimate of $2.41 is pegged higher than the Zacks Consensus Estimate of $2.39. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HIG carries a Zacks Rank of 3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at HIG’s third-quarter performance.
Q3 Earnings Rewind
In the third quarter of 2023, adjusted operating earnings of $2.29 per share outpaced the Zacks Consensus Estimate by 17.4%. The quarterly results benefited from the Commercial Lines unit, which benefited on the back of higher premiums written and the Group Benefits business, which gained from improved fully insured ongoing premiums and sound core earnings margin. However, the upside was partly offset by an increased expense level and poor performance in the Hartford Funds segment.
Now, let us see how things have shaped up prior to the fourth-quarter earnings announcement.
Factors at Play
Hartford Financial’s revenues are expected to have benefited due to improved premiums across its Commercial Lines, Personal Lines and Group Benefits businesses in the fourth quarter. Our estimate for overall earned premiums is $5,351.4 million, which indicates an improvement of 6.6% year over year.
Persistent rate increases, new business growth, expanding policies in force and higher retention rates are expected to have benefited the Commercial Lines business in the to-be-reported quarter. However, the upside is likely to have been partly offset by the continued incidence of catastrophe losses, which, in turn, are expected to have inflicted some adversities on the underwriting results. We anticipate Commercial Lines’ earned premiums to improve 7.4% year over year to $2,972.5 million in the fourth quarter.
The Personal Lines business is expected to have benefited on the back of renewal written price increases in the fourth quarter. The homeowners’ insurance business is likely to have been aided by favorable net rates and insured value increases. However, the auto insurance business is likely to have suffered a setback from elevated severity losses and the continued inflationary headwinds.
We expect earned premiums of the Personal Lines unit to be $792.8 million, which implies a 5.1% rise from the prior-year quarter’s reported number.
The Group Benefits business is expected to have been driven by higher premiums, solid sales and improved long-term disability results in the to-be-reported quarter. Our estimate for earned premiums of the segment is $1,586.2 million, which indicates an improvement of 5.9% from the prior-year quarter’s reported figure.
Additionally, increased returns from the fixed-income portfolio of Hartford Financial, attributable to higher interest rates, are likely to have aided its fourth-quarter investment results. We expect net investment income to be $697.6 million, up 9% year over year.
However, its bottom line is expected to have suffered a blow due to escalating benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. We expect total benefits, losses and expenses to increase 2.8% year over year to $5,431.1 million in the fourth quarter. HIG’s margins are also likely to have been hurt by expenses linked with investments to boost digital, analytics and data science capabilities.
Other Stocks to Consider
Here are some other companies from the broader Finance space, which, according to our model, also have the right combination of elements to beat on earnings this time around:
Coinbase Global, Inc. (COIN - Free Report) has an Earnings ESP of +151.28% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Coinbase’s bottom line for the to-be-reported quarter suggests a 95.9% year-over-year improvement. COIN beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 63%.
Everest Group, Ltd. (EG - Free Report) has an Earnings ESP of +1.18% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for EG’s fourth-quarter 2023 earnings is pegged at $14.63 per share, which indicates an increase of 19.8% from the prior-year quarter’s reported figure.
Everest Group’s earnings beat estimates in three of the trailing four quarters, missing once, the average surprise being 24.5%.
Brookfield Asset Management Ltd. (BAM - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Brookfield Asset Management’s bottom line for the to-be-reported quarter indicates 9.7% growth from the year-ago period. BAM beat earnings estimates twice in the past four quarters and missed on the other two occasions, with an average surprise of 0.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.