Will Genworth Financial (GNW) Earnings Disappoint Again? - Analyst Blog
Genworth Financial, Inc. (GNW) is set to report fourth-quarter and full-year 2014 results on Feb 10, after the market closes. Last quarter, the company posted a 500% negative earnings surprise. Let’s see how things are shaping up for this announcement.
Factors Influencing This Past Quarter
Long-term car sale will remain low before the company’s products (higher-return, lower risk products and with the Privileged Choice Select 3) gain traction. In addition, loss ratio is likely to increase to 25–30% for 2014.
A soft interest rate environment will continue to hurt investment results and reinvestment yields will remain weak.
Earnings Whispers
Our proven model does not conclusively show that Genworth Financial will beat on earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for a likely beat. That is not the case here as you will see below.
Zacks ESP: Genworth Financial has an Earnings ESP of -144.44%. This is because the Most Accurate estimate stands at a loss of 4 cents and the Zacks Consensus Estimate stands higher at 9 cents earnings per share.
Zacks Rank: Genworth Financial’s Zacks Rank #5 (Strong Sell) lowers the predictive power of ESP. A negative ESP also increases the probability of an earnings miss.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Arch Capital Group Ltd. (ACGL) with Earnings ESP of +0.95 and a Zacks Rank #1 (Strong Buy).
Radian Group (RDN) with Earnings ESP of +13.89 and a Zacks Rank #2 (Buy).
First American Financial Corporation (FAF) with Earnings ESP of +1.75% and a Zacks Rank #3 (Hold).
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GENWORTH FINL (GNW): Free Stock Analysis Report
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ARCH CAP GP LTD (ACGL): Free Stock Analysis Report
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