We expect property and casualty insurer
) to beat expectations when it reports its first-quarter 2014
results on April 29.
Why a Likely Positive Surprise?
Our proven model shows that ACE Limited is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +1.41%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2
: ACE Limited has a Zacks Rank #2 (Buy). Note that stocks with
Zacks Rank #1, 2 and 3 have significantly higher chances of
beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of ACE Limited's Zacks Rank #2 and +1.41% ESP
makes us very confident of a positive earnings beat on April 29.
What is Driving the Better-than-Expected
A benign cat environment favoring better underwriting results,
are expected to drive ACE Limited results in the first quarter.
ACE limited is one of the largest reinsurance buyers in the world
and as such, its risk appetite remains steady. It is benefitting
from a softening reinsurance market in terms of pricing and
better terms, which is expected to further consolidate its
In addition, the acquisitions by the company are expected to ramp
up its growth profile.
The company's share buybacks, lowering the share count, should
also boost the bottom line.
The positive trend is backed by the trailing three-quarter
average surprise of 15.97%, much of which was contributed by the
impressive 19.50% surprise achieved in the last reported quarter.
Moreover, better underwriting results continue to aid the
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this coming quarter:
AXIS Capital Holdings Limited
), earnings ESP of +3.28% and a Zacks Rank #2 (Buy).
RenaissanceRe Holdings Ltd
), earnings ESP of +3.15% and a Zacks Rank #1 (Stong Buy).
The Allstate Corporation
), earnings ESP of +3.15% and a Zacks Rank #3 (Hold).
ACE LIMITED (ACE): Free Stock Analysis Report
ALLSTATE CORP (ALL): Free Stock Analysis
AXIS CAP HLDGS (AXS): Free Stock Analysis
RENAISSANCERE (RNR): Free Stock Analysis
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