Chubb Limited (CB) to Report Q4 Earnings: What's in Store?
Chubb Limited CB is slated to report fourth-quarter 2020 results on Feb 2, after market close. The company delivered a negative earnings surprise of 7.14% in the last reported quarter.
Factors to Consider
Premiums in the fourth quarter are expected to have benefited from positive rate increases in property catastrophe lines, strong renewal retention, new business written across a number of retail and wholesale lines, strong account retention across most lines, growth in Chubb Agribusiness unit and new business in casualty lines. However, given the pandemic, the company expects reduced premiums in the to-be-reported quarter.
A sustained low reinvestment rates on new and reinvested assets are expected to weigh on investment results. However, higher average invested assets is expected to have limited the downside. Chubb estimates adjusted net investment income run rate to be in the range of $890 million to $900 million. The Zacks Consensus Estimate for investment income is pegged at $898 million, indicating 4.7% increase from the year-ago reported figure.
The Zacks Consensus Estimate for revenues is pegged at $8.9 billion, indicating a downside of about 0.7% from the year-ago reported figure.
Revenue growth and improved margins are expected to have translated into higher earnings per share for the company in the to-be-reported quarter.
Annual core operating tax rate is estimated to be in the range of 15% to 17% in the to-be-reported quarter.
Total benefits and expenses are likely to have increased mainly due to loss and loss expenses, policy acquisition costs and policy benefits.
The property and casualty insurer estimates other income and expense in the range of $0 and a $5 million in the near term.
Chubb’s exposure to catastrophe events like Hurricane Dorian and severe weather-related events in the U.S., including winter-related storms, and storms in Australia is likely to have weighed on underwriting profitability.
The Zacks Consensus Estimate for fourth-quarter 2020 indicates an improvement of 25.8% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Chubb 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. That is not the case as you can see below.
Earnings ESP: Chubb has an Earnings ESP of -0.35%. This is because the Most Accurate Estimate of $2.86 is pegged lower than the Zacks Consensus Estimate of $2.87. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Chubb Limited Price and EPS Surprise
Chubb Limited price-eps-surprise | Chubb Limited Quote
Zacks Rank: Chubb currently carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
The Allstate Corporation ALL has an Earnings ESP of +5.72% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cincinnati Financial Corporation CINF has an Earnings ESP of +0.83% and a Zacks Rank #3.
NMI Holdings Inc NMIH has an Earnings ESP of +5.43% and a Zacks Rank of 3.
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