Assurant’s Q3 Earnings Boost Stock, Yet Challenges Remain
Atlanta, Georgia-based Assurant, Inc. (AIZ) provides risk management solutions in housing and lifestyle markets. With a market capitalization of $11.6 billion, the company operates in the Americas, Indo-Pacific, and Europe.
Stock Performance and Market Comparison
Assurant’s stock has outperformed the broader market over the past year. AIZ shares have risen more than 34.7% year-to-date and 34.8% over the last 52 weeks, while the S&P 500 Index ($SPX) recorded gains of 25.8% so far in 2024 and 31.8% over the past year.
In contrast, when compared to the SPDR S&P Insurance ETF (KIE), which achieved a 37.2% increase year-to-date and 36.9% over the past year, AIZ has fallen short.
Positive Earnings Report Surfaces Mixed Results
AIZ’s stock price soared by 6.9% after the company reported better-than-expected Q3 earnings on November 5. The firm’s total revenues grew by 7% year-over-year, reaching approximately $3 billion and surpassing Wall Street expectations. Additionally, adjusted earnings per share (EPS) of $3 exceeded analyst predictions by an impressive 20%, increasing investor confidence.
Despite these positive earnings, AIZ has faced profitability challenges. Policyholder benefits jumped 20.5% from the same quarter last year to $776.8 million, while underwriting, selling, general, and administrative expenses rose 7.4% to over $2 billion. Consequently, net income fell by 29.6% to $133.8 million.
Future Earnings Outlook
For the current fiscal year, which concludes in December, analysts anticipate a slight decrease in adjusted EPS to $15.41. However, AIZ maintains a strong track record of surpassing earnings estimates over the past four quarters.
Currently, AIZ holds a consensus rating of “Moderate Buy.” Among six analysts, three recommend a “Strong Buy,” while the others suggest a “Hold” rating.
Analyst Insights
This assessment is a shade less optimistic than a month ago, when four analysts were on board with “Strong Buy” ratings. On November 12, Keefe, Bruyette & Woods analyst Tommy McJoynt maintained a “Market Perform” rating but raised the price target to $212.
Currently, AIZ’s mean price target stands at $229.60, indicating a 1.1% premium from current price levels. The highest target, set at $240, suggests a modest upside potential of 5.7%.
On the date of publication, Aditya Sarawgi did not have any positions, either directly or indirectly, in any of the securities mentioned in this article. All information in this article is for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views expressed herein are solely those of the author and do not reflect the opinions of Nasdaq, Inc.
