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Travelers (TRV) Set to Report Q1 Earnings: What's in Store?

The Travelers Companies, Inc. TRV is set to report first-quarter 2024 earnings on Apr 17. The company delivered an earnings surprise in two of the last reported quarters while missing in the other two.

Factors to Consider

Better performances across all three segments are likely to aid Travelers’ first-quarter results.

Premiums are likely to have benefited from better pricing, solid renewal rate change, strong retention and exposure growth. We estimate premiums to increase 11.9% to $9.9 billion.

A favorable interest rate environment, higher average levels of invested assets, better results from the fixed-income portfolio and strong returns from the non-fixed-income portfolio are likely to aid investment results in the to-be-reported quarter. We estimate net investment income  to increase 18.3% to $784.6 million.

The Personal Insurance segment is likely to have benefited from growth at the profitable agency auto and homeowners business. We estimate earned premiums at Personal Insurance to be $3.9 billion, indicating an improvement of 11% from the year-ago reported figure.

An increase in net written premiums coupled with higher net investment income and other revenues is likely to have aided the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is currently pegged at $11.2 billion, indicating a 15.1% increase from the year-ago reported figure.

Underwriting is likely to have benefited from better pricing and increased exposure, which, in turn, are expected to have led to an improvement in the combined ratio. We estimate the combined ratio to be 95.1, an improvement of 40 basis points from the year-ago reported number.

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 expenses. We estimate expenses to increase 8.5% in the to-be-reported quarter to $9.5 billion.

Continued share buybacks are anticipated to have provided an additional boost to the bottom line.

The Zacks Consensus Estimate for first-quarter 2024 earnings per share is pegged at $4.69, suggesting an increase of 14.1% from the year-ago reported figure.

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, as u can see below:

Earnings ESP: Travelers has an Earnings ESP of -0.73%. This is because the Most Accurate Estimate of $4.66 is pegged lower than the Zacks Consensus Estimate of $4.69. 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 and EPS Surprise
The Travelers Companies, Inc. Price and EPS Surprise

The Travelers Companies, Inc. price-eps-surprise | The Travelers Companies, Inc. Quote

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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:

Cincinnati Financial Corporation CINF has an Earnings ESP of +5.06% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $1.58, indicating a year-over-year increase of 77.5%

CINF’s earnings beat estimates in each of the last four reported quarters.

Axis Capital Holdings AXS has an Earnings ESP of +1.56% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $2.68, indicating a year-over-year decrease of 15%.

AXS earnings beat estimates in each of the last four reported quarters.

Allstate Corporation ALL has an Earnings ESP of +9.30% and currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2024 earnings is pegged at $3.78, implying an increase of 390.8% from the year-ago reported figure.

ALL’s earnings beat estimates in three of the last four reported quarters while missing in one.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

The Allstate Corporation (ALL) : Free Stock Analysis Report

Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report

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