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What's in the Cards for Loews (L) This Earnings Season?

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Loews Corporation is slated to report second-quarter 2019 results on Aug 5, before market open. The company delivered positive earnings surprise in two of the last four reported quarters.

Let’s see how things are shaping up for this announcement.

Better performances at CNA Financial (CNA - Free Report) , Loews Hotels and Boardwalk Pipeline are likely to aid Loews’ second-quarter performance.

CNA Financial’s second-quarter results are likely to benefit from solid performances across its segments - Commercial and Specialty. Premiums are likely to be fueled by increase in new business, renewal premium change, rate increase and solid retention. This, in turn, may drive Loews' performance as it has a stake in CNA Financial. It contributed more than 75% of Loews’ net income in the first quarter of 2019.

Loews Hotel is expected to perform well given solid performance across its properties.

Boardwalk Pipeline, Loews’ subsidiary, is likely to benefit from growth-enhancing projects and the transportation storage of natural gas liquids. However, higher expenses could limit margin expansion.

Diamond Offshore , in which Loews has a stake, results are likely to be hurt by lower day rate, drop in contract drilling revenues and a decline in rigs working. Challenging conditions in the global offshore drilling market are a concern. This, in turn, may impact Loews' results.

Sustained share buybacks are likely to boost the bottom line.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 75 cents, implying 1.2% decrease from the year-ago reported figure.

What Our Quantitative Model States

Our proven model does not conclusively show that Loews is likely to beat on earnings in the to-be-reported period. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Loews has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Loews Corporation Price and EPS Surprise

Zacks Rank: Loews carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks going into an earnings announcement, especially when the company is seeing negative estimate revisions.

A Stock to Consider

A stock from the insurance industry with the perfect mix of elements to outpace estimates this time around is as follows:

American International Group (AIG - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank of 2. The company is slated to announce second-quarter earnings on Aug 7. You can see the complete list of today’s Zacks #1 Rank stocks here

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