Will ACE Ltd (ACE) Keep its Earnings Streak Alive in Q3?
We expect property and casualty insurer ACE Limited (ACE) to beat expectations when it reports third-quarter 2014 results on Oct 21.
Why a Likely Positive Surprise?
Our proven model shows that ACE Limited is likely to beat earnings when it reports on Oct 21 because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +2.98%. This is a meaningful and leading indicator of a likely positive earnings surprise for the company.
Zacks Rank: ACE Limited carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1, 2 and 3 have a significantly higher chance of beating earnings.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
What is Driving the Better-Than-Expected Earnings?
Strategic acquisitions made by ACE Limited coupled with its expanded product portfolio will drive better premium for the company. Improved pricing should also add to the upside.
A benign catastrophe environment will favor improved underwriting results.
Continued share repurchase will also boost the bottom line.
The positive trend is evident in the trailing four-quarter average earnings beat of 11.46% driven by better underwriting results.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter:
Aspen Insurance Holdings Ltd. (AHL), Earnings ESP of +20.59% and a Zacks Rank #2.
The Chubb Corporation (CB), Earnings ESP of +4.66% and a Zacks Rank #2
The Allstate Corporation (ALL), Earnings ESP of +4.41% and a Zacks Rank #2.
Read the Full Research Report on CB
Read the Full Research Report on ACE
Read the Full Research Report on ALL
Read the Full Research Report on AHL
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