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With a market cap of over $19 billion, Ohio-based Cincinnati Financial Corporation (CINF), founded in 1950, primarily operates in the property casualty insurance sector. The company offers a comprehensive range of insurance solutions, covering commercial casualty, property, auto, workers' compensation, life insurance, and investment management services. The insurance firm is expected to announce its fiscal Q2 earnings for 2024 after the market closes on Thursday, July 25.
Ahead of the event, analysts expect Cincinnati Financial to report a profit of $1.03 per share, down 14.9% from $1.21 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimate over the last four quarters. Its adjusted EPS for the last reported quarter increased 93.3% year over year to $1.72, beating the Wall Street estimates by 1.8%.
Looking ahead to fiscal 2024, analysts expect Cincinnati Financial to report an EPS of $6.32, up 4.8% from $6.03 in fiscal 2023. Its fiscal 2025 EPS is projected to grow 10.6% annually to $6.99.
CINF stock has gained 18.3% on a YTD basis, outperforming the S&P 500 Index’s ($SPX) 17.7% returns and S&P 500 Financials Sector SPDR’s (XLF) 12.7% gains over the same time frame.
Cincinnati Financial's 63-year streak of annual dividend increases since 1961 has crowned it a "Dividend King," highlighting its commitment to rewarding shareholders. Last month, it raised its quarterly dividend by 8% to $0.81 per share, offering an annualized dividend yield of 2.57%. With a healthy payout ratio of 44.3% and an attractive stock price, Cincinnati Financial remains a compelling choice for investors, keeping it in the green this year.
Cincinnati Financial's Q1 earnings performance saw both upsides and challenges. Positively, robust investment income and a $484 million after-tax increase in equity securities' fair value boosted net income. Reduced catastrophe losses improved the combined ratio to 93.6%, 7.1 points better than last year.
However, increased IBNR reserves due to loss uncertainty and elevated inflation impacting incurred losses were headwinds. While commercial lines enjoyed healthy renewal price increases, market conditions like rate pressure in workers' compensation and reinsurance portfolio shifts added complexity. Cincinnati Re and Cincinnati Global showed strength despite inflationary and pricing pressures. Shares of Cincinnati Financial dipped 6.4% post Q1 earnings report on April 25.
However, CINF stock has recently been on an upward trajectory after Bank of America (BAC) upgraded its price target to $156 on July 11.
The consensus opinion on Cincinnati Financial stock is moderately bullish, with a “Moderate Buy” rating overall. Out of nine analysts covering the stock, four recommend a “Strong Buy,” one suggests a “Moderate Buy,” and the remaining four advise a “Hold” rating.
The average target price for Cincinnati Financial is $131.38, indicating a potential upside of 7.4% from the current price levels.
On the date of publication, Sristi Jayaswal 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.
