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With a market cap of $21.1 billion, Ohio-based Cincinnati Financial Corporation (CINF) operates in the insurance industry. The company provides a wide range of property and casualty insurance products through its various subsidiaries and segments, including commercial, personal, and excess and surplus lines, as well as life insurance and investment services.
Shares of the insurer have outperformed the broader market over the past 52 weeks. CINF has risen 29.1% during this period, contrasting with the S&P 500 Index's ($SPX) 26.1% rally. In 2024, CINF shares surged 30.3%, compared to SPX's 17.2% YTD gain.
However, zooming in further, Cincinnati Financial has lagged behind the S&P Insurance ETF SPDR's (KIE) gains of 32.4% over the past 52 weeks. Despite this, CINF has outpaced KIE's 23.2% YTD increase.
Cincinnati Financial has outperformed relative to the SPX due to robust financial performance, strong investment returns, effective premium growth strategies, and a consistent track record of dividend increases. Moreover, despite missing revenue estimates, the stock rose 3% following its Q2 earnings release on July 25 due to the company's stronger-than-expected profit driven by an 11% increase in earned premiums and a solid performance in its commercial lines segment. Additionally, the profit of $1.29 per share exceeded analyst estimates, boosting investor confidence.
For the current fiscal year, ending in December, analysts expect CINF's EPS to grow 9.1% year over year to $6.58 per share. The company's earnings surprise history is promising. It topped the consensus estimates in all of the last four quarters.
The consensus rating among the 10 analysts covering the stock is a “Moderate Buy.” That’s based on four “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is slightly more bullish than three months ago, with three “Strong Buy” ratings on the stock.
On Jul. 31, Keefe, Bruyette & Woods raised its price target for Cincinnati Financial to $150 - Street-high price target and maintained an “Outperform” rating, following a strong Q2 earnings report and improved EPS estimates for 2024, with expectations for continued premium growth and strong reserving practices. This implies a modest potential upside of 11.3% from the current price levels.
The mean price target of $136.75 represents a premium of only 1.4% to CINF's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
