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What Awaits Cincinnati Financial (CINF) in Q4 Earnings?

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Cincinnati Financial Corporation (CINF - Free Report) is slated to report fourth-quarter 2019 earnings on Feb 5, after market close. The company’s earnings and revenues are expected to have improved year over year.

In the last reported quarter, Cincinnati Financial’s earnings surpassed the Zacks Consensus Estimate by 16.13% due to price increase and premium growth initiatives.

Let’s see how things have shaped up prior to this announcement.

The consolidated property and casualty insurance business is likely to have gained from renewal price increases and growth in new business premiums written.

The acquisition of Cincinnati Global underwriting is expected to be accretive to 2019 earnings.

Strong performance at Commercial Lines segment, disciplined expansion of Cincinnati Re, increase in new business written and company’s agent-focused business model are likely to have benefited Cincinnati Financial’s fourth-quarter performance.

The Commercial Lines segment is expected to have benefited from growth initiatives and increase in insurance rates.

Premiums are likely to have been supported by growth initiatives, price increases and a higher level of insured exposures.

Strong cash flow from operating activities is likely to have aided net investment income.

The top line is likely to have benefited from higher premiums and increase in investment income. The Zacks Consensus Estimate for fourth-quarter revenues stands at $1.51 billion, implying an increase of 1.68% from the year-ago reported figure.

A not-so-active catastrophe environment, retention of more profitable accounts and better pricing on less profitable business are likely to have aided underwriting profit and combined ratio.

Expenses are expected to have increased due to higher insurance loss and policyholder benefits as well as underwriting, acquisition and insurance expenses.

The Zacks Consensus Estimate for fourth-quarter earnings per share stands at $1.11, suggesting an increase of 13.3% from the year-ago reported figure.

Earnings Surprise History

The company boasts an attractive earnings surprise history, having surpassed estimates in the trailing four quarters, with a positive surprise of 20.8%, on average. This is depicted in the chart below:

Cincinnati Financial Corporation Price and EPS Surprise

What Our Quantitative Model States

Our proven model predicts an earnings beat for Cincinnati Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Cincinnati Financial has an Earnings ESP of +1.95%. This is because the Most Accurate Estimate is pegged at $1.14 per share, higher than the Zacks Consensus Estimate of $1.11 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cincinnati Financial carries a Zacks Rank #3.

Other Stocks to Consider

MetLife, Inc. MET has an Earnings ESP of +0.57% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lincoln National Corporation LNC has an Earnings ESP of +0.54% and a Zacks Rank of 2.

Assurant, Inc. AIZ has an Earnings ESP of +0.62% and a Zacks Rank of 3.

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