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.
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