We expect property and casualty insurer
Cincinnati Financial Corp.
) to beat expectations when it reports third quarter 2013 results
on Oct 24.
Why a Likely Positive Surprise?
Our proven model shows that Cincinnati Financial is likely to
beat earnings because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or Earnings ESP, which represents
the difference between the Most Accurate estimate and the Zacks
Consensus Estimate, is 10.91%. This is very meaningful and a
leading indicator of a likely positive earnings surprise for
Zacks Rank #1 (Strong Buy)
: Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and #5) should never be considered going into an
The combination of Cincinnati Financial's Zacks Rank # 1
(Strong Buy) and 10.91% ESP makes us very confident in looking
for a positive earnings beat on Oct 24th.
What is Driving the Better Than Expected
Numerous strategic growth initiatives undertaken by Cincinnati
Financial in the commercial as well as excess and surplus
line of business along with a gradually improving insurance
market is expected to aid earnings
Management is appointing agencies and expanding product
offerings to compensate the decline in businesses.
Cincinnati Financial delivered positive surprises in the last
four quarters with the highest surprise coming at 122% in the
fourth quarter of 2012. The positive earnings surprise was driven
by increase in premium and new agency appointments.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows these have the right combination of elements to post
an earnings beat this quarter.
The Hanover Insurance Group Inc.
), earnings ESP of +8.82% and a Zacks Rank #1 (Strong Buy).
Aspen Insurance Holdings Ltd. (
), earnings ESP of +6.25% and a Zacks Rank #2 (Buy).
Arch Capital Group Ltd.
), earnings ESP of +7.23% and a Zacks Rank #2 (Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis
ASPEN INS HLDGS (AHL): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
HANOVER INSURAN (THG): Free Stock Analysis
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