Hartford Financial (HIG): Is a Beat in Store for the Stock?

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The Hartford Financial Services Group, Inc. HIG will release second-quarter 2018 financial results on Jul 26, after the closing bell.

Last reported quarter, the company delivered a positive earnings surprise of 17.59%.  Let's see, how things are shaping up for this announcement.

Q2 Expectations

Hartford Financials' Commercial Lines and Personal Auto businesses are expected to sustain its trend of delivering solid results in the to-be-reported quarter. The Commercial lines segment is also expected to perform well, contributing to the company's topline. The performance is also expected to get boosted by the Group Benefit and Mutual Funds segments.

The company expects its book value per share to have decreased by about $2.45 from Mar 31, 2018 onward because of the sale of Talcott. The same has likely enabled the company to effectively deploy its capital amongst shareholders.

The company is expected to have retained its focus on disciplined capital deployment in the second quarter as well.

Hartford Financial projected a decrease of $2 million in interest expenses during the second quarter due to $500 million of hybrid calls with a coupon of 8-18% in June. Moreover, the company expects the outstanding debt to have been lowered by around $320 billion along with reducing the average coupon rate and total annual fixed charges.

However, higher auto loss costs might weigh on the margins, repeating the trend over the past few quarters.

What the Quantitative Model States

Per our proven model, Hartford Financial is likely to beat on earnings this quarter to be reported. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Earnings ESP: Hartford Financial has an Earnings ESP of +0.28%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter .

The Hartford Financial Services Group, Inc. Price and EPS Surprise

The Hartford Financial Services Group, Inc. Price and EPS Surprise | The Hartford Financial Services Group, Inc. Quote

Zacks Rank: Hartford Financial carries a Zacks Rank #2, which increases the predictive power of ESP. Together with a positive ESP, which indicates a likely earnings surprise, chances of beating estimates are always pegged higher.

Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some other stocks worth considering from the insurance industry with the right combination of elements to also surpass estimates this time around are as follows:

XL Group Ltd. XL is set to report second-quarter earnings on Jul 31 and has an Earnings ESP of +6.37%. The company is a Zacks #3 Ranked player. You can see the complete list of today's Zacks #1 Rank stocks here .

Prudential Financial, Inc. PRU has an Earnings ESP of +0.09% and a Zacks Rank of 3. The company is set to announce second-quarter earnings on Aug 1.

American Financial Group, Inc. AFG has an Earnings ESP of +1.68% and a Zacks Rank of 1. The company is set to announce second-quarter earnings on Aug 1.

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The Hartford Financial Services Group, Inc. (HIG): Free Stock Analysis Report

Prudential Financial, Inc. (PRU): Free Stock Analysis Report

XL Group Ltd. (XL): Free Stock Analysis Report

American Financial Group, Inc. (AFG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: HIG , PRU , AFG

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