We expect financial transaction service provider
The Travelers Companies, Inc
) to beat expectations when it reports third-quarter 2013 results
on Oct 22.
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Why a Likely Positive Surprise?
Our proven model shows that Travelers Companies 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 +8.29%. This is
noteworthy and a leading indicator of a likely positive earnings
Zacks Rank #2 (Buy):
Note that stocks with a Zacks Rank #1, 2 or 3 have a
significantly higher chance of beating earnings. The sell-rated
stocks (carrying a Zacks Rank #4 or 5) going into an earnings
announcement should never be considered, especially when the
company is seeing negative estimate revisions.
The combination of a Zacks Rank # 2 (Buy) and Earnings ESP of
+8.29% makes us anticipate a positive earnings beat by Travelers
Companies on Oct 22.
What is Driving the Better-than-Expected
With a wide array of product offerings, we believe Travelers
Companies will continue to benefit from its strong market
position and reap economies of scale. Favorable rate environment
is also expected to aid results.
Its inorganic growth story also looks impressive.
Travelers Companies also remains focused on its efforts to reduce
operating expenses and acquisition costs, in order to improve
underwriting margins and introduce a more competitively priced
Its share repurchase activity is also expected to boost the
Travelers Companies delivered positive surprises in the last four
quarters with the highest surprise coming at 500% in the fourth
quarter of 2012. Higher underwriting margins and lower
catastrophe losses in the first half of 2013 has been aiding
Other Stocks to Consider
Travelers Companies is not the only firm looking up this earnings
season. We also expect earnings beats to come from these 3
), earnings ESP of +12.12% and a Zacks Rank #1 (Strong Buy).
The Hanover Insurance Group Inc
), earnings ESP of +15.0% and a Zacks Rank #1 (Strong Buy).
The Chubb Corp.
), earnings ESP of +3.85% and a Zacks Rank #1 (Strong Buy).