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Cincinnati Financial (CINF) Q1 Earnings: A Surprise in Store?

Cincinnati Financial Corp. CINF is set to report first-quarter 2016 results on Apr 26, 2016, after the market closes. Last quarter, the company posted a positive earnings surprise of 20.88%. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Cincinnati Financial’s Commercial Lines Property Casualty Insurance segment is likely to have witnessed top-line growth on the back of several growth initiatives, a gradual increase in insurance rates as well as modest improvement in pricing.

In addition, the company has appointed new agencies in the quarter. These appointments – one of the several strategic initiatives undertaken by the company – are likely have improved the company’s market share and thus, boosted its results.

Further, Cincinnati Financial’s reinsurance team, Cincinnati Re is expected to see improvement in premium revenues. Also, the company’s Excess and Surplus line is likely to have performed well and is anticipated to achieve rate increases despite a soft market environment.

However, turmoil in group benefits associated with the Affordable Care Act and low interest environment have likely weighed on the life insurance segment’s results.

With respect to the surprise trend, Cincinnati Financial delivered positive surprises in three of the last four quarters with an average beat of 44.20%.

Earnings Whispers

Our proven model does not conclusively show that Cincinnati Financial is likely to beat on earnings 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 an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 77 cents.

Zacks Rank: Cincinnati Financial carries a Zacks Rank #3 (Hold), 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:

American Financial Group Inc. AFG has an Earnings ESP of +4.13% and a Zacks Rank #2. The company is slated to report first-quarter earnings on May 2.

CNA Financial Corporation CNA has an Earnings ESP of +13.33% and Zacks Rank #3. The company is set to report first-quarter earnings on May 2.

The Allstate Corporation ALL has an Earnings ESP of +2.16% and a Zacks Rank #3. The company is set to report first-quarter earnings on May 4.

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CINCINNATI FINL (CINF): Free Stock Analysis Report
 
ALLSTATE CORP (ALL): Free Stock Analysis Report
 
CNA FINL CORP (CNA): Free Stock Analysis Report
 
AMER FINL GROUP (AFG): Free Stock Analysis Report
 
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