Results: Cincinnati Financial Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Cincinnati Financial Corporation (NASDAQ:CINF) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 9.1% to hit US$10b. Cincinnati Financial also reported a statutory profit of US$11.66, which was an impressive 93% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Cincinnati Financial

Taking into account the latest results, the eight analysts covering Cincinnati Financial provided consensus estimates of US$9.75b revenue in 2024, which would reflect a noticeable 2.6% decline over the past 12 months. Statutory earnings per share are expected to dive 42% to US$6.81 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$9.63b and earnings per share (EPS) of US$6.74 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$122, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cincinnati Financial analyst has a price target of US$135 per share, while the most pessimistic values it at US$110. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Cincinnati Financial is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cincinnati Financial's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.6% by the end of 2024. This indicates a significant reduction from annual growth of 7.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Cincinnati Financial is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$122, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Cincinnati Financial. Long-term earnings power is much more important than next year's profits. We have forecasts for Cincinnati Financial going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Cincinnati Financial has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.