Cincinnati Financial Corporation CINF is slated to report first-quarter 2021 results on Apr 28, after market close. The company delivered an earnings surprise of 37.61% in the last reported quarter.
Factors to Consider
Strong renewal premiums, price increases, premium growth initiatives and contribution from both Cincinnati Global as well as Cincinnati Re are likely to have aided premiums in the to-be-reported quarter. The Zacks Consensus Estimate for premiums earned is pegged at $1.5 billion. indicating an increase of 2.4% from the year-ago reported figure.
Despite a still low interest rate environment, strong cash flow from operating activities is estimated to have aided investment income.
Excess and surplus lines segment is likely to have recorded an improved performance on the back of renewal price increases.
The Personal Lines segment is likely to have improved on the back of higher renewal written premiums that benefited from rate increases, expanded use of pricing precision tools and improved combined ratio.
Underwriting performance is likely to have improved on the back of continued segmentation of business, retaining more profitable accounts and getting better pricing on less profitable business. Combined ratio is expected to have been better in the to-be-reported quarter. The consensus estimate for combined ratio at the Insurance segment is pegged at 92, an improvement of 700 basis points from the year-ago reported quarter.
Total benefits and expenses are likely to have increased mainly due to higher underwriting, acquisition and insurance expenses, interest expense. This, in turn, might have weighed on operating margin.
The Zacks Consensus Estimate for first-quarter 2021 earnings per share is pegged at $1.27, indicating an increase of 51.19% from the year-ago quarter’s reported figure. The consensus estimate for revenues is pegged at $1.6 billion, indicating a decline of 1.8% from the year-ago reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Cincinnati Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: Cincinnati Financial has an Earnings ESP of +6.30%. This is because the Most Accurate Estimate of $1.35 is pegged higher than the Zacks Consensus Estimate of $1.27. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Cincinnati Financial Corporation Price and EPS Surprise
Zacks Rank: Cincinnati Financial currently carries a Zacks Rank of 4 (Sell).
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
The Allstate Corporation ALL presently has an Earnings ESP of +2.67% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar Holdings, Inc. PLMR currently has an Earnings ESP of +6.93% and is a Zacks #3 Ranked stock.
Cigna Corporation CI currently has an Earnings ESP of +1.01% and is a Zacks #3 Ranked stock.
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The Allstate Corporation (ALL): Free Stock Analysis Report
Cincinnati Financial Corporation (CINF): Free Stock Analysis Report
Cigna Corporation (CI): Free Stock Analysis Report
Palomar Holdings, Inc. (PLMR): Free Stock Analysis Report
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