Back to top

Image: Shutterstock

What's in the Cards for Chubb (CB) This Earnings Season?

Read MoreHide Full Article

Chubb (CB - Free Report) is set to report third-quarter 2019 earnings on Oct 29, after market close. The company delivered positive surprise of 2.60% in the last reported quarter, driven by higher premium revenues.

Factors at Play

Chubb’s third-quarter results are likely to have benefited from premium growth, expanded invested assets and a solid market presence.

Premiums in the to-be-reported quarter are likely to have benefited from improved commercial property and casualty insurance pricing, prudent underwriting, higher policy renewal and new business volume growth.

Growth in invested assets and strong cash flows is likely to have aided net investment income in the to-be reported quarter. The company estimates quarterly adjusted net investment income between $890 million and $900 million.

Continued focus on capitalizing on growth opportunities in its North American business along with prudent management of risk is likely to have aided the business.

Overseas General Insurance segment is likely to have gained from its middle–market and small commercial business.

The top-line is likely to have benefited from improved premium revenues from North America Commercial and Personal P&C businesses.

Sustained buyback is likely to have provided additional boost to the bottom line.

Expenses are expected to have increased due to higher interest, higher losses, administrative expenses and policy acquisition costs.

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $2.64, implying an increase of 9.5% from the year-ago reported figure.

What Our Quantitative Model States

Our proven model predicts an earnings beat for Chubb in the soon-to-be-reported quarter because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise.

Earnings ESP: Chubb has an Earnings ESP of +0.44%. This is because the Zacks Consensus Estimate of $2.64 is lower than the Most Accurate Estimate of $2.65. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Chubb Limited Price and EPS Surprise

Zacks Rank: Chubb carries a Zacks Rank #3.

Stocks to Consider

Some stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Radian Group (RDN - Free Report) has an Earnings ESP of +0.92% and a Zacks Rank of 2. The company is set to release third-quarter earnings on Oct 30.

NMI Holdings (NMIH - Free Report) has an Earnings ESP of +1.23% and is a Zacks #3 Ranked player. The company is slated to announce third-quarter earnings on Nov 6.

Hallmark Financial Services (HALL - Free Report) is set to report third-quarter earnings on Nov 7. It has an Earnings ESP of +3.03% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in