Cincinnati Financial Corporation CINF is scheduled to report fourth-quarter 2024 earnings on Feb. 10, after market close. The insurer delivered an earnings surprise in three of the last four reported quarters and missed in one, the average beat being 12.54%.
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Factors to Note
Increased exposure, better pricing, increased property casualty agency and new business written premiums, higher standard lines new business and improved premiums from Cincinnati Re are likely to have favored premiums in the to-be-reported quarter. We expect earned premiums to be $2.3 billion, up 13.4% from the year-ago reported figure. The Zacks Consensus Estimate is also pegged at $2.3 billion.
Rate increases, a higher level of insured exposures, higher policy retention rates and changes in policy deductibles or mix of business are expected to have benefited premiums at Personal Lines. The Zacks Consensus Estimate for Personal Lines revenues is pegged at $712 million, indicating an improvement of 27.1% from the year-ago quarter’s reported figure.
Improved agency renewal and new business written premiums due to higher renewal pricing are likely to have aided Excess and Surplus lines premiums. The Zacks Consensus Estimate for Excess and Surplus lines revenues is pegged at $165 million, indicating an improvement of 11.5% from the year-ago quarter’s reported figure.
Net investment income is likely to have benefited from strong cash flow from operating activities and higher bond yields. We expect investment income to be $247.7 million, up 3.6% from the year-ago reported quarter.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.6 billion, suggesting an increase of 13.5% from the prior-year quarter.
Total benefits and expenses are likely to have increased mainly due to higher insurance losses and contract holders' benefits, underwriting, acquisition and insurance expenses, interest expense and other operating expenses. We expect total expenses to rise 18.6% to $2.2 billion.
Cincinnati Financial is expected to have benefited from better pricing and increased exposure, which are likely to have aided underwriting profitability. We expect the combined ratio to be 92.4 in the to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter earnings per share is pegged at $1.90, indicating a decrease of 16.7% from the prior-year quarter reported figure.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Cincinnati Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) that increases the odds of an earnings beat. This not the case as you can see below.
Earnings ESP: Cincinnati Financial has an Earnings ESP of +6.60%. This is because the Most Accurate Estimate of $2.03 is pegged higher than the Zacks Consensus Estimate of $1.90. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Cincinnati Financial Corporation Price and EPS Surprise
Cincinnati Financial Corporation price-eps-surprise | Cincinnati Financial Corporation Quote
Zacks Rank: Cincinnati Financial currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are three insurance stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
First American Financial FAF has an Earnings ESP of +4.97% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.07, indicating a year-over-year increase of 55.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
FAF’s earnings beat estimates in two of the last four reported quarters and missed in the other two.
Kinsale Capital KNSL has an Earnings ESP of +1.00% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $4.34, implying an increase of 12.1% from the year-ago reported figure.
KNSL’s earnings beat estimates in each of the last four reported quarters.
Palomar Holdings PLMR has an Earnings ESP of +0.27% and carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.24, implying an increase of 11.7% from the year-ago reported figure.
PLMR’s earnings beat estimates in three of the last four reported quarters while missing in one.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
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 >>Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
First American Financial Corporation (FAF) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR) : Free Stock Analysis Report
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