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American Financial (AFG) Down 2.8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for American Financial Group (AFG - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American Financial due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for American Financial Group, Inc. before we dive into how investors and analysts have reacted as of late.
AFG Q2 Earnings Beat on Strong P&C Underwriting, Investment Income
American Financial Group, Inc. reported second-quarter 2026 net operating earnings per share of $2.82, which surpassed the Zacks Consensus Estimate by 17%. The bottom line increased 31.8% year over year, driven by underwriting income and stronger returns from its alternative investment portfolio. Total revenues increased approximately 5.5% year over year, to $2.03 billion from $1.924 billion. The top line also beat the Zacks Consensus Estimate by 0.65%.
The quarterly results benefited from record pretax Property & Casualty ("P&C") operating income, healthy premium growth, improved underwriting margins and higher investment income from alternative investments.
Behind the Headlines
Net earned premiums rose 2.9% year over year to approximately $1.7 billion in the second quarter of 2026. The figure was slightly below both the Zacks Consensus Estimate and our estimate of $1.71 billion. Net investment income rose 20.1% year over year to $221 million in the quarter under review. The figure was higher than our estimate of $195.4 million and surpassed the Zacks Consensus Estimate of $197.9 million.
Total costs and expenses increased 1.1% year over year to $1.7 billion due to higher underwriting expenses and interest charges, partly offset by lower losses and loss adjustment expenses. Our estimate was $1.72 billion.
Segmental Update
Specialty P&C Insurance: The segment generated $1.9 billion in net written premiums, which improved 6% year over year, reflecting new business opportunities, favorable renewal pricing and increased exposures while maintaining disciplined underwriting. The Specialty P&C Insurance segment’s underwriting profit increased 26.3% year over year to $144 million in the quarter, driven by higher underwriting profit across Property & Transportation and Specialty Financial groups. The figure exceeded our estimate of $143 million. Pre-tax core operating earnings before income taxes of the P&C Insurance segment were $350 million, up 28.2% year over year.
Property & Transportation Group: Net written premiums increased 5% year over year to $797 million in the second quarter, driven by crop insurance growth, favorable pricing and higher exposures. The Property & Transportation Group generated underwriting profit of $57 million, more than double the $27 million reported a year ago, driven by stronger transportation and agricultural business performance. The combined ratio improved 490 basis points year over year to 90.3%.
Specialty Casualty Group: Net written premiums increased 6% year over year to $812 million. The Specialty Casualty Group generated underwriting profit of $45 million, down from $49 million in the prior-year quarter, due to lower workers' compensation and executive liability profitability, offset by strength in energy, construction and environmental liability businesses. The combined ratio deteriorated 60 basis points year over year to 94.5%.
Specialty Financial Group: Net written premiums rose 10% year over year to $306 million. In the Specialty Financial Group, underwriting profit of $42 million, up from $38 million in the prior-year quarter, was primarily driven by stronger performance in its fidelity/crime and financial institutions businesses. Catastrophe losses in Specialty Financial Group totaled $10 million in the reported quarter, narrower than the year-ago loss of $19 million. The current combined ratio of 85.6% improved 50 basis points year over year.
Financial Update
American Financial exited the second quarter of 2026 with total cash and investments of $17.1 billion, which decreased 0.7% from the 2025-end level. Long-term debt of $1.82 billion remained unchanged from the 2025-end level. As of June 30, 2026, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $59.85 compared with $58.38 at the end of 2025. Annualized return on equity was 20.3% in the second quarter, up 530 basis points year over year.
AFG’s Prudent Capital Deployment
American Financial repurchased $26 million of its common stock in the second quarter of 2026. It paid total cash dividends of 88 cents per share, continuing its disciplined capital management strategy.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 19.27% due to these changes.
VGM Scores
Currently, American Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, American Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
View the Zacks #1 Rank List
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American Financial (AFG) Down 2.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for American Financial Group (AFG - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American Financial due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for American Financial Group, Inc. before we dive into how investors and analysts have reacted as of late.
AFG Q2 Earnings Beat on Strong P&C Underwriting, Investment Income
American Financial Group, Inc. reported second-quarter 2026 net operating earnings per share of $2.82, which surpassed the Zacks Consensus Estimate by 17%. The bottom line increased 31.8% year over year, driven by underwriting income and stronger returns from its alternative investment portfolio. Total revenues increased approximately 5.5% year over year, to $2.03 billion from $1.924 billion. The top line also beat the Zacks Consensus Estimate by 0.65%.
The quarterly results benefited from record pretax Property & Casualty ("P&C") operating income, healthy premium growth, improved underwriting margins and higher investment income from alternative investments.
Behind the Headlines
Net earned premiums rose 2.9% year over year to approximately $1.7 billion in the second quarter of 2026. The figure was slightly below both the Zacks Consensus Estimate and our estimate of $1.71 billion. Net investment income rose 20.1% year over year to $221 million in the quarter under review. The figure was higher than our estimate of $195.4 million and surpassed the Zacks Consensus Estimate of $197.9 million.
Total costs and expenses increased 1.1% year over year to $1.7 billion due to higher underwriting expenses and interest charges, partly offset by lower losses and loss adjustment expenses. Our estimate was $1.72 billion.
Segmental Update
Specialty P&C Insurance: The segment generated $1.9 billion in net written premiums, which improved 6% year over year, reflecting new business opportunities, favorable renewal pricing and increased exposures while maintaining disciplined underwriting. The Specialty P&C Insurance segment’s underwriting profit increased 26.3% year over year to $144 million in the quarter, driven by higher underwriting profit across Property & Transportation and Specialty Financial groups. The figure exceeded our estimate of $143 million. Pre-tax core operating earnings before income taxes of the P&C Insurance segment were $350 million, up 28.2% year over year.
Property & Transportation Group: Net written premiums increased 5% year over year to $797 million in the second quarter, driven by crop insurance growth, favorable pricing and higher exposures. The Property & Transportation Group generated underwriting profit of $57 million, more than double the $27 million reported a year ago, driven by stronger transportation and agricultural business performance. The combined ratio improved 490 basis points year over year to 90.3%.
Specialty Casualty Group: Net written premiums increased 6% year over year to $812 million. The Specialty Casualty Group generated underwriting profit of $45 million, down from $49 million in the prior-year quarter, due to lower workers' compensation and executive liability profitability, offset by strength in energy, construction and environmental liability businesses. The combined ratio deteriorated 60 basis points year over year to 94.5%.
Specialty Financial Group: Net written premiums rose 10% year over year to $306 million. In the Specialty Financial Group, underwriting profit of $42 million, up from $38 million in the prior-year quarter, was primarily driven by stronger performance in its fidelity/crime and financial institutions businesses. Catastrophe losses in Specialty Financial Group totaled $10 million in the reported quarter, narrower than the year-ago loss of $19 million. The current combined ratio of 85.6% improved 50 basis points year over year.
Financial Update
American Financial exited the second quarter of 2026 with total cash and investments of $17.1 billion, which decreased 0.7% from the 2025-end level. Long-term debt of $1.82 billion remained unchanged from the 2025-end level.
As of June 30, 2026, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $59.85 compared with $58.38 at the end of 2025. Annualized return on equity was 20.3% in the second quarter, up 530 basis points year over year.
AFG’s Prudent Capital Deployment
American Financial repurchased $26 million of its common stock in the second quarter of 2026. It paid total cash dividends of 88 cents per share, continuing its disciplined capital management strategy.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 19.27% due to these changes.
VGM Scores
Currently, American Financial has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, American Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.