CNA Financial Upped to Strong Buy


On Sep 17, Zacks Investment Research upgraded CNA Financial Corporation (CNA) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?     

CNA Financial has witnessed rising earnings estimates on the back of solid second-quarter 2013 results. Moreover, this property and casualty insurer delivered positive earnings surprises in 3 of the last 4 quarters. The long-term expected earnings growth rate for this stock is 5%.    

CNA Financial reported second quarter results on Jul 29. Non-GAAP earnings per share came in at 75 cents, surpassing the Zacks Consensus Estimate by 17.2%, and year-ago earnings by 33.9%.

The improvement came on the back of higher net investment income, better current accident year underwriting results, and a settlement benefit of $30 million related to workers' compensation residual market litigation.

Net written premiums of CNA Financial improved 7% year over year, fueled by the acquisition of Hardy as well as increased rates across both CNA Specialty and CNA Commercial. Additionally, CNA Financial’s net investment income improved 30%, largely attributable to better limited partnership investment results.

Book value improved 3% over 2012 to $43.81 as on Jun 30, 2013.

The Zacks Consensus Estimate for fiscal 2013 increased 3.7% to $3.08 per share as 2 of 5 estimates were revised higher over the last 60 days. For 2014 as well, 2 of 5 estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 5.3% to $4.60 per share.

Other Stocks to Consider

Property and casualty insurers Alleghany Corporation  (Y), Everest Re Group Ltd. (RE), and Global Indemnity plc (GBLI), each carrying a Zacks Rank #1 (Strong Buy) are also worth considering.

Read the Full Research Report on CNARead the Full Research Report on RERead the Full Research Report on YRead the Full Research Report on GBLIZacks Investment Research
View Comments (0)