On May 13, Zacks Investment Research upgraded
First American Financial Corporation
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The rank upgrade for this Property & Casualty insurer was
driven by strong estimate revisions on the back of impressive
first-quarter 2014 results. Notably, with this, the company has
delivered positive earnings surprises in the trailing 4 quarters
with an average beat of 30.9%. Further, First American Financial's
expected EPS growth now stands at 10.0%.
On Apr 24, First American Financial released its first-quarter 2014
results. Net income per share came in at 20 cents, outpacing the
Zacks Consensus Estimate of 10 cents. However, the reported figure
was down 28.6% year over year.
Results benefited from lower expenses, partially offset by a
decline in top line.
First American Financial's top line fell 12.0% year over year to
$1.0 billion, primarily owing to lower direct premiums and escrow
fees as well as agent premium. However, a fall of more than 10% in
expenses to $977.5 million was impressive.
Closed orders per day during the quarter declined 38.0% due to a
significant decrease in refinance orders.
Title orders opened in the quarter were 271.2 million, down 28.0%
year over year. Title orders closed in the quarter were 180.1
million, down 38.1% year over year.
Average revenue per direct order in the reported quarter improved
39% due to higher purchase and commercial mix.
The Zacks Consensus Estimate for 2014 advanced 9.9% to $1.89 per
share over the past 30 days. Also, for 2015, it moved north 1.5% to
$2.09 per share.
Other Stocks to Consider
Other stocks in this space worth considering include
OneBeacon Insurance Group, Ltd.
Allied World Assurance Company Holdings, AG
). All three stocks hold the same rank as First American Financial.
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ALLIED WORLD AS (AWH): Free Stock Analysis
FIRST AMER FINL (FAF): Free Stock Analysis
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ALLEGHANY CORP (Y): Free Stock Analysis Report
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