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Loews Corp (L) Q3 Earnings: What Lies Ahead for the Stock?

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Loews Corporation L is slated to report third-quarter 2018 results on Nov 5, before the market opens. The company boasts a stellar record of delivering positive surprises in all the last four reported quarters.  

Let’s see, how things are shaping up for this announcement.

Consistently solid performances at CNA Financial CNA and at Loews Hotels have possibly aided Loews’ third-quarter results.

To focus on commercial property casualty insurance, CNA Financial divested reinsurance, personal automobile insurance, life insurance and group health business as well as reinsured its asbestos and pollution liabilities to reduce balance sheet risk. This in turn, has been helping the company deliver a better performance. Favorable rate changes and new businesses should have added to the upside.

CNA Financial continues to efficiently manage its long-term care book of business through prudent product claim management, thereby mitigating risks as well as effecting a rate increase.

Loews is intensifying focus on its highly profitable and distinguished hotels in the upscale market. The company is targeting properties located in Orlando as operations in the region have been generating superior returns. Loews Hotels and Universal had opened the 600-room Aventura Hotel at Universal, Orlando. A steady strong performance at Loews Hotel should have driven overall results in the third quarter.

Boardwalk Pipeline is expected to have delivered better numbers on the strength of its growth-boosting projects.  

However, lower day rate, drop in contract drilling revenues and lower rigs working are likely to have weighed on the Diamond Offshore DO segment.

The Zacks Consensus Estimate for quarterly earnings is pegged at 98 cents, up 113% year over year.

A lower tax incidence owing to a drop in the tax rate might provide an additional boost to the company’s bottom line. Share buyback should have contributed to this uptick.

What Our Quantitative Model States

Our proven model does not conclusively show that Loews is likely to beat on earnings in the impending quarterly results. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Loews has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 98 cents each. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Loews Corporation Price and EPS Surprise

Loews Corporation Price and EPS Surprise | Loews Corporation Quote

Zacks Rank: Loews has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

A Stock to Consider

A stocks worth considering from the finance sector with the right combination of elements to surpass estimates this time around is as follows:

Cboe Global Markets, Inc. CBOE is set to report third-quarter earnings on Nov 2 and has an Earnings ESP of +0.99%. The company is a Zacks #3 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Loews Corporation (L) : Free Stock Analysis Report
CNA Financial Corporation (CNA) : Free Stock Analysis Report
Diamond Offshore Drilling, Inc. (DO) : Free Stock Analysis Report
Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
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