Recent Performance and Market Comparison
Switzerland-based Chubb Limited (CB) offers a wide range of insurance and reinsurance products. With a market capitalization of $116.1 billion, the company delivers commercial, personal property, casualty insurance, personal accident and supplemental health insurance, reinsurance, and life insurance to various clients.
Over the past 52 weeks, Chubb’s shares have struggled compared to the broader market. Specifically, CB’s stock has increased by 28.7%, while the S&P 500 Index ($SPX) has grown by 30.4%. Nonetheless, Chubb’s performance on a year-to-date (YTD) basis shows a 26.1% increase, which surpasses the SPX’s 23.1% gain.
Comparative Performance with Financial Sector
Looking closer, Chubb’s performance falls short when compared to the Financial Select Sector SPDR Fund (XLF), which has seen a 42% growth over the past year and a 32.2% YTD return.
Third Quarter Earnings Impact
Chubb’s share price fell by 1.2% following the release of its mixed earnings report for Q3 on October 29. The company reported a 6.6% year-over-year revenue increase, totaling $15 billion, but this fell short of analysts’ expectations. A bright spot in the report was the core operating income, which rose 15.6% to $5.72 per share, exceeding analyst estimates by 16%. Despite this success, the overall results were impacted by higher catastrophe losses that overshadowed the gains from its North America P&C, Overseas General, and Life Insurance divisions.
Future Earnings Expectations
For the fiscal year ending in December, analysts anticipate a 3.4% decline in CB’s EPS to $21.77. Historically, the company has performed well, beating consensus estimates in each of the last four quarters.
Analyst Ratings and Price Projections
Among 24 analysts covering Chubb, the consensus rating is a “Moderate Buy.” This includes 11 “Strong Buy,” two “Moderate Buy,” nine “Hold,” one “Moderate Sell,” and one “Strong Sell” ratings. Overall, these ratings reflect a more positive sentiment compared to three months ago, where only ten analysts had suggested a “Strong Buy.”
Price Target Updates
On November 6, Wells Fargo upheld an “Equal Weight” rating for CB while increasing its price target to $268, a level Chubb has already surpassed. The average price target now stands at $301.22, implying a modest upside of 4.5% from current levels. The highest target in the market is set at $349, suggesting a potential upside of 21.1%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
