Strength Seen in Cincinnati Financial (CINF): Can Its 3.1% Jump Turn into More Strength?
Cincinnati Financial (CINF) shares rallied 3.1% in the last trading session to close at $110.87. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 15.2% loss over the past four weeks.
Agent-centered business model, improving premium, industry-leading margins, solid capital position and effective capital deployment poise it well for growth.
Sustained solid operational performance at Commercial Lines and Personal Lines segments poise CINF for long-term growth. Premium growth at Cincinnati Financial, one of the top 25 U.S. P&C insurers, outperforms the industry average. Premium growth initiatives, price increases and a higher level of insured exposure should help it retain the momentum.
The insurer targets a value creation ratio of 10% to 13% over the next five years. Sustained solid operational performance should help it achieve the target.
This insurer is expected to post quarterly earnings of $1.36 per share in its upcoming report, which represents a year-over-year change of -13.9%. Revenues are expected to be $2.07 billion, up 9.8% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Cincinnati Financial, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CINF going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Cincinnati Financial is part of the Zacks Insurance - Property and Casualty industry. Travelers (TRV), another stock in the same industry, closed the last trading session 3.4% higher at $172.21. TRV has returned -10.1% in the past month.
Travelers' consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $3.76. Compared to the company's year-ago EPS, this represents a change of -10.9%. Travelers currently boasts a Zacks Rank of #3 (Hold).
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Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
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