Will Cincinnati Financial (CINF) Beat Q3 Earnings Estimates?
Cincinnati Financial Corporation CINF is scheduled to report third-quarter 2023 earnings on Oct 26, after market close. The insurer delivered an earnings surprise in the last two reported quarters of 2023.
Factors to Note
Growth initiatives, increased exposure, better pricing, increased property casualty agency and new business written premiums, higher standard lines new business and higher premiums from Cincinnati Re are likely to have benefited premiums. The Zacks Consensus Estimate for earned premium is pegged at $2 billion, indicating an increase of 46% from the year-ago reported quarter’s figure. We expect earned premiums to be $2 billion.
High net worth clients and an agent-centric model are likely to have aided net written premiums at Personal Lines. Excess and surplus lines premiums are likely to have improved banking, driven by an increase in agency new business and renewal written premiums.
Net premiums earned are expected to have increased across all the segments.
Net investment income in the to-be-reported quarter is likely to have benefited from strong cash flow from operating activities and higher dividend income and interest income. Bond yields rose due to an improvement in the interest rate environment. We expect investment income to be $210.8 million.
The Zacks Consensus Estimate for third-quarter revenues stands at $2.2 billion, in line with our estimate. The consensus estimate suggests an increase of 7.6% from the prior-year quarter.
Total benefits and expenses are likely to have increased mainly due to higher insurance losses and contract holders’ benefits and higher underwriting, acquisition and insurance expenses as well as other operating expenses. We expect total expenses to rise 3.8% to $2.1 billion.
Despite higher catastrophe loss, underwriting results are likely to benefit from better pricing.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.07, indicating an increase of 46.6% from the prior-year quarter.
What Our Quantitative Model Predicts
Our proven model predicts an earnings beat for Cincinnati Financial this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Cincinnati Financial has an Earnings ESP of +3.00%. This is because the Most Accurate Estimate of $1.10 is pegged higher than the Zacks Consensus Estimate of $1.07. 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 #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
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:
Arch Capital Group ACGL has an Earnings ESP of +1.37% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.48, indicating an increase of 428.6% from the year-ago reported figure.
ACGL’s earnings beat estimates in the last four reported quarters.
W.R. Berkley Corporation WRB has an Earnings ESP of +1.39% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.14, indicating an increase of 12.9%.
WRB’s earnings beat estimates in three of the last four reported quarters and missed in one.
American Financial Group AFG has an Earnings ESP of +0.41% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2023 earnings stands at $2.47, implying an increase of 10.3% from the year-ago reported quarter.
AFG’s earnings beat estimates in three of the last four reported quarters and missed in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
American Financial Group, Inc. (AFG) : Free Stock Analysis Report
Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
