Yahoo Finance Travelers (TRV) to Report Q1 Earnings: What's in the Offing?
The Travelers Companies, Inc. TRV is set to report first-quarter 2023 earnings on Apr 19. The company delivered an earnings surprise in each of the last four reported quarters.
Factors to Consider
TRV’s first-quarter results are likely to benefit from solid performance across its three segments.
Better pricing, solid renewal rate change, robust retention and exposure growth are likely to have favored premiums in the to-be-reported quarter. The Zacks Consensus Estimate for premiums is pegged at $9 billion, indicating a 12.2% increase from the year-ago reported number. We estimate premiums to increase 10.8% to $8.8 billion.
Travelers expects after-tax net investment income from the non-fixed income portfolio in the first quarter, including earnings from short-term securities of about $515 million. An improving interest rate environment, coupled with higher average levels of invested assets, reliable results from the fixed-income portfolio and strong returns from the non-fixed income portfolio, is likely to aid investment results in the to-be-reported quarter. The Zacks Consensus Estimate for NII is $658.3 million, indicating a 3.3% increase from the year-ago reported figure. We estimate the metric to increase 7.3% to $683.7 million.
Continued growth at the profitable agency auto and homeowners business is likely to aid results of the Personal Insurance segment in the quarter to be reported. The Zacks Consensus Estimate for earned premiums at Personal Insurance is pegged at $3.3 billion, indicating an improvement of 13.2% from the year-ago reported figure.
Higher net written premiums coupled with increase in net investment income and other revenues are likely to have boosted the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $9.8 billion, indicating an 11.3% increase from the year-ago reported figure. We estimate the metric to increase 10.6% to $9.8 billion.
TRV is expected to have benefited from better pricing and increased exposure, which are likely to have aided underwriting profitability. The Zacks Consensus Estimate for the combined ratio is pegged at 98.
Continued share buybacks are anticipated to have provided an additional boost to the bottom line.
However, expenses are expected to have risen on higher claims and claim adjustment expenses, amortization of deferred acquisition costs, general and administrative expenses as well as interest expense.
The Zacks Consensus Estimate for first-quarter 2023 earnings per share is pegged at $3.64, suggesting a decline of 13.7% from the year-ago reported figure. We estimate the bottom line to decrease 19.3% to $3.41.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Travelers this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case here.
Earnings ESP: Travelers has an Earnings ESP of -2.91%. This is because the Most Accurate Estimate is pegged at $3.53, lower than the Zacks Consensus Estimate of $3.64. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The Travelers Companies, Inc. Price and EPS Surprise
The Travelers Companies, Inc. price-eps-surprise | The Travelers Companies, Inc. Quote
Zacks Rank: Travelers currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:
Kinsale Capital Group KNSL has an Earnings ESP of +3.34% and a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.25, indicating an increase of 38% from the year-ago reported figure.
KNSL’s earnings beat estimates in the last four reported quarters.
Chubb Limited CB has an Earnings ESP of +0.69% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $4.35, indicating an increase of 13.9%.
CB’s earnings beat estimates in three of the last four reported quarters and missed in one.
RLI Corporation RLI has an Earnings ESP of +0.27% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2023 earnings stands at $1.21, implying a decline of 15.4% from the year-ago reported quarter.
RLI’s earnings beat estimates in the last four reported quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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RLI Corp. (RLI) : Free Stock Analysis Report
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Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
