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Cincinnati Financial (CINF) to Report Q4 Earnings: What to Expect

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Cincinnati Financial Corporation (CINF - Free Report) is scheduled to report fourth-quarter 2023 earnings on Feb 6, after market close. The insurer delivered an earnings surprise in the three reported quarters of 2023.

Factors to Note

Premiums are likely to have benefited from growth initiatives, increased exposure, better pricing, increased property casualty agency and new business written premiums, higher standard lines new business and higher premiums from Cincinnati Re. The Zacks Consensus Estimate for earned premium is pegged at $2.1 billion, indicating an increase of 8.7% from the year-ago reported quarter’s figure. We expect earned premiums to be $2 billion.

Premiums at Personal Lines are likely to have benefited from high net worth clients and an agent-centric model. Excess and surplus lines premiums are likely to have improved, driven by an increase in agency new business and renewal written premiums.

Net investment income in the to-be-reported quarter is likely to have benefited from strong cash flow from operating activities and higher dividend income and interest income. Bond yields rose due to an improvement in the interest rate environment. We expect investment income to be $226.6 million.

The Zacks Consensus Estimate for fourth-quarter revenues stands at $2.3 billion, suggesting an increase of 9.8% from the prior-year quarter.

Total benefits and expenses are likely to have increased mainly due to higher insurance losses and contract holders’ benefits and higher underwriting, acquisition and insurance expenses as well as other operating expenses. We expect total expenses to rise 3.8% to $2.1 billion.

Despite catastrophe losses that induce volatility in profits, underwriting results are likely to benefit from better pricing.

The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $1.85, indicating an increase of 45.7% from the prior-year quarter.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Cincinnati Financial this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case, as you can see here.

Earnings ESP: Cincinnati Financial has an Earnings ESP of -2.70%. This is because the Most Accurate Estimate of $1.80 is pegged lower than the Zacks Consensus Estimate of $1.85. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cincinnati Financial currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $1.94, implying a decrease of 6.4% from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACGL beat earnings estimates in the last four reported quarters.

Everest Re Group (EG - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $14.63, indicating an increase of 19.8% from the year-ago reported figure.

EG beat earnings estimates in three of the last four reported quarters, while missed in one.

CNO Financial Group (CNO - Free Report) has an Earnings ESP of +8.24% and a Zacks Rank of 2. The Zacks Consensus Estimate for fourth-quarter 2023 earnings stands at 85 cents, indicating an increase of 51.8% from the year-ago reported figure.

CNO beat earnings estimates in one of the last four reported quarters, missed the same in two and matched estimates in one.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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