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CB Stock Near 52-Week High, Outperforms Industry: Time to Hold?

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Key Takeaways

  • Chubb focuses on middle-market expansion and enhancements to core packages and specialty products.
  • Recent acquisitions, premium gains, and rate increases support CB's long-term growth strategy.
  • Chubb projects rising investment income alongside strong capital that fuels dividends and buybacks.

Shares of Chubb Limited (CB - Free Report) closed at $305.98 on Thursday, near its 52-week high of $308.31. This proximity underscores investor confidence. It has the ingredients for further price appreciation. 

The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $286.99 and $283.90, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

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Image Source: Zacks Investment Research

With a market capitalization of $121.99 billion, the average volume of shares traded in the last three months was 1.8 million.

CB is an Outperformer

Shares of Chubb have gained 11.1% in the past year, outperforming its industry’s growth of 5.8%.

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Image Source: Zacks Investment Research

CB’s Expensive Valuation

Shares of Chubb are trading at a premium compared with the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.55X is higher than the industry average of 1.48X.

Shares of The Travelers Companies, Inc. (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and Kinsale Capital Group, Inc. (KNSL - Free Report) are trading at a multiple higher than the industry average.

CB’s Growth Projection Encourages

The Zacks Consensus Estimate for Chubb’s 2025 earnings per share indicates a year-over-year increase of 5.1%. The consensus estimate for revenues is pegged at $59.77 billion, implying a year-over-year improvement of 6.3%.

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 8.9% and 6.5%, respectively, from the corresponding 2025 estimates.

Optimist Analyst Sentiment on CB

One of the 11 analysts covering the stock has raised estimates for 2025 and 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 earnings has moved up 0.6% in the past 30 days, and for 2026, the same has moved north 0.2% in the same time frame.

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Image Source: Zacks Investment Research

Target Price Reflects Potential Upside

Based on short-term price targets offered by 23 analysts, the Zacks average price target is $310.65 per share. The average indicates a potential 4.7% upside from the last closing price.

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Image Source: Zacks Investment Research

Impressive Earnings Surprise History of CB

Chubb Limited’s bottom line surpassed earnings estimates in each of the last four quarters, the average being 13.37%.

CB’s Favorable Return on Capital

Return on equity in the trailing 12 months was 12.9%, better than the industry average of 8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.

Also, return on invested capital (ROIC) has been increasing over the last few quarters amid capital investments made over the same time frame. This reflects CB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 8.5%, better than the industry average of 6.2%.

Factors Benefiting CB Stock

Chubb Limited remains focused on capitalizing on the potential of middle-market businesses (both domestic and international) as well as enhancing traditional core packages and specialty products for long-term growth. In its efforts to accelerate growth, Chubb Limited is also making strategic investments in various initiatives. 

CB pursues strategic mergers and acquisitions to diversify its portfolio, add capabilities and synergies, and expand its geographic footprint. Recently, Chubb Limited agreed to acquire the insurance businesses of Liberty Mutual in Thailand and Vietnam. Acquisitions have also improved premium revenues. Premiums should also benefit from commercial P&C rate increases, new business, and strong renewal retention. An impressive inorganic growth story helps to achieve a higher long-term return on equity. 

Investment income should benefit from improved operating cash flow. Chubb Limited expects the Investment income run rate to continue to grow, as the company reinvests the cash flow at higher rates. Chubb Limited expects adjusted net investment income to be $1.775 billion in the fourth quarter and $1.81 billion in first-quarter 2026.

Chubb Limited has a strong capital position and sufficient cash-generation capabilities, which support wealth distribution to shareholders and growth initiatives. 

Being a P&C insurer, CB is exposed to catastrophe events, which induce volatility in underwriting profitability and affect the combined ratio. Given the uncertainty surrounding the magnitude of cat loss, higher losses could drain earnings. 

Also, Chubb’s leverage and times interest earned compare unfavorably with the industry.

Conclusion

Chubb Limited’s market-leading position, compelling portfolio, strong renewal retention, positive rate increases, solid capital position, and better return on capital pave the way for long-term growth. 

The strong capital and liquidity position enable Chubb Limited to distribute wealth to its shareholders via share buybacks and dividend payouts. The company’s current dividend yield of 1.2% is better than the industry average of 0.2%. The recent 6.6% increase in dividends marks the 32nd straight year of dividend increase. Chubb Limited has a solid track record of dividend hikes, with the metric witnessing a 10-year CAGR of 3.8%. This makes the stock an attractive pick for investors looking for a safe and steady flow of cash. 

However, given its premium valuation, we prefer to stay cautious on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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