Technology

Will Cincinnati Financial (CINF) Q1 Earnings Beat Estimates?

Cincinnati Financial Corporation CINF is slated to report first-quarter 2019 results on Apr 24, after market close. The company delivered positive surprise in three out of the last four quarters.

Let’s see how things are shaping up for this announcement.

Premiums in the to-be reported quarter are likely to rise on price increases, higher level of insured exposure and disciplined expansion of Cincinnati Re. Also, the company’s agent-focused business model is likely to add to the upside.

Solid policy retention and an increase in average renewal price in property casualty segment are expected to drive the top line.

An improved rate environment is estimated to support increase in investment income.

These are expected to drive top-line improvement in the to-be reported quarter.

Total benefits and expenses have likely increased mainly due to higher insurance loss and contract holders’ benefits, underwriting, acquisition and insurance expenses. This, in turn, might weigh on operating margin.

Being a property and casualty insurer, Cincinnati Financial is exposed to the vagaries of nature. To weather the impact of cat loss events on its overall performance to some extent, the company expanded its management liability and surety footprint in 2018. These lines of business complement many of its commercial accounts and are also not impacted by weather-related natural catastrophes.

The Zacks Consensus Estimate for earnings stands at 94 cents, reflecting 30.6% year-over-year increase.

What Our Quantitative Model Indicates

Our proven model conclusively shows that Cincinnati Financial is likely to beat on earnings this season. This is because a stock has the right combination of both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP:  Cincinnati Financial has an Earnings ESP of +4.26%. This is because the Most Accurate Estimate is pegged at 98 cents, higher than the Zacks Consensus Estimate of 94 cents. 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

Cincinnati Financial Corporation Price and EPS Surprise | Cincinnati Financial Corporation Quote

Zacks Rank: Cincinnati Financial has a Zacks Rank #2, which increases the predictive power of ESP.

We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Some stocks worth considering from the property and casualty insurance industry with the perfect mix of elements to surpass estimates this time around are as follows:

Aflac Incorporated AFL is set to report first-quarter earnings on Apr 25 and has an Earnings ESP of +0.57%. The company has a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Allstate Corporation ALL has an Earnings ESP of +5.08% and a Zacks Rank of 3. The company is set to release first-quarter earnings on May 1.

The Hartford Financial Services Group, Inc. HIG has an Earnings ESP of +0.27% and a Zacks Rank #3. The company is slated to announce first-quarter earnings on May 1.

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Aflac Incorporated (AFL): Free Stock Analysis Report

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

Cincinnati Financial Corporation (CINF): Free Stock Analysis Report

The Allstate Corporation (ALL): 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.