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Will Cincinnati Financial's (CINF) Q3 Earnings Surprise?

Cincinnati Financial Corp.CINF is set to report third-quarter 2015 results on Oct 27, after the market closes. Last quarter, the company posted a substantial amount of positive earnings surprise. Let's see how things are shaping up for this announcement.

Factors Influencing This Past Quarter

Cincinnati Financial's Commercial Lines Property Casualty Insurance segment likely have witnessed top-line improvement in the to be reported quarter on the back of several growth initiatives as well as a gradual increase in insurance rates. The segmental performance will, in turn, leverage the company's overall top-line growth.

Cincinnati Financial's Excess and Surplus line of business has been performing well over the past one year. Given the improving excess and surplus lines market, we expect the segment to have bolstered the company's underwriting income in the third quarter.

Appointing new agencies has been Cincinnati Financial's key strategic move since the last few years and the company continues the same strategy to gain greater market share. We expect this expanding market share to boost the company's top line in the soon-to-be-reported quarter and hence, lead to better earnings.

However, a still tepid U.S. economic recovery, adverse regulatory developments associated with Universal Life products with secondary guarantees and continued turmoil in group benefits associated with the Affordable Care Act. likely have affected Cincinnati Financial's Life Insurance segment.

Earnings Whispers

Our proven model does not conclusively show that Cincinnati Financial will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1(Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Cincinnati Financial has 0.00% Earnings ESP. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 69 cents per share.

Zacks Rank: Cincinnati Financial carries a Zacks Rank #3, which increases the predictive power of ESP. However, an ESP of 0.00% makes surprise prediction difficult.

Stocks to Consider

Here are some companies from the insurance industry that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Arch Capital Group Ltd. ACGL has an Earnings ESP of +4.26% and a Zacks Rank #2. The company is scheduled to report third-quarter earnings on Oct 28.

CBOE Holdings, Inc. CBOE has an Earnings ESP of +2.82% and a Zacks Rank #2. The company will release third-quarter earnings on Oct 30.

Cigna Corp. CI has an Earnings ESP of +1.38% and a Zacks Rank #3. The company is expected to report its third quarter 2015 earnings date on Nov 6.

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CINCINNATI FINL (CINF): Free Stock Analysis Report

CIGNA CORP (CI): Free Stock Analysis Report

CBOE HOLDINGS (CBOE): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): 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.


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

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