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Will Rate Hikes Aid Hartford Financial's (HIG) Q1 Earnings?
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The Hartford Financial Services Group, Inc. (HIG - Free Report) is scheduled to release first-quarter 2024 results on Apr 25, 2024, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for Hartford Financial’s first-quarter earnings per share is pegged at $2.43, which indicates an improvement of 44.6% from the prior-year quarter’s reported figure. The consensus mark for revenues is $4.4 billion, suggesting 11.8% growth from the year-ago quarter’s reported number.
Hartford Financial’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 11.8%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
Our proven model predicts an earnings beat for Hartford Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Hartford Financial has an Earnings ESP of +0.81% because the Most Accurate Estimate of $2.45 is pegged higher than the Zacks Consensus Estimate of $2.43. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HIG carries a Zacks Rank of 3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at HIG’s fourth-quarter performance.
Q4 Earnings Rewind
In the fourth quarter of 2023, adjusted operating earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate by 28%. The quarterly results were aided by improved property and casualty (P&C) earned premiums and a year-over-year decline in catastrophe losses. Fully insured ongoing premiums in the Group Benefits business also contributed to the sound performance.
Now, let us see how things have shaped up prior to the first-quarter earnings announcement.
Factors at Play
Hartford Financial’s revenues are expected to have benefited due to improved premiums across its Commercial Lines, Personal Lines and Group Benefits businesses in the first quarter. The Zacks Consensus Estimate for overall earned premiums is $5.5 billion, which indicates an improvement of 9.6% year over year.
Persistent rate increases, new business growth, expanding policies in force and higher retention rates are expected to have benefited the Commercial Lines business in the to-be-reported quarter. Expanding underlying margins is expected to aid this business. However, the upside is likely to have been partly offset by the ongoing headwinds in the workers’ compensation market, barring which, the remainder of Commercial Lines is expected to be higher than loss cost trends. The Zacks Consensus Estimate expects Commercial Lines’ earned premiums to improve 12% year over year to $3.1 billion in the first quarter.
The Personal Lines business is expected to have benefited on the back of renewal written price increases in the first quarter. The homeowners’ insurance business is likely to have been aided by favorable net rates and insured value increases. Moderating severity trends coupled with rising rates are expected to drive underlying loss ratio improvement in the quarter for the Auto insurance business. However, HIG has a long road ahead to return this business to targeted profitability.
The Zacks Consensus Estimate for earned premiums of the Personal Lines unit is $808 million, which implies a 9.3% rise from the prior-year quarter’s reported number.
The Group Benefits business is expected to have been driven by higher premiums, solid sales, improved mortality trends and long-term disability results in the to-be-reported quarter. The Zacks Consensus Estimate for earned premiums of the segment is $1.6 billion, which indicates an improvement of 5.1% from the prior-year quarter’s reported figure.
Additionally, increased returns from the fixed-income portfolio of Hartford Financial, attributable to higher interest rates, are likely to have aided its first-quarter investment results.
However, the company’s bottom line is expected to have suffered a blow due to escalating benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. HIG’s margins are also likely to have been hurt by expenses linked with investments to boost digital, analytics and data science capabilities.
Other Stocks to Consider
Here are some companies from the broader Finance space that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for CleanSpark’s bottom line for the to-be-reported quarter is pegged at 6 cents per share, indicating a 126.1% improvement from the year-ago period. The consensus estimate for CLSK’s revenues is pegged at $103.8 million, suggesting a 143.9% increase from a year ago.
Mr. Cooper Group Inc. (COOP - Free Report) has an Earnings ESP of +1.90% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Mr. Cooper Group’s bottom line for the to-be-reported quarter is pegged at $2.11 per share, indicating 80.3% year-over-year growth. The estimate remained stable over the past week. The consensus estimate for COOP’s revenues is pegged at $493.9 million, suggesting a 49.7% increase from a year ago.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Alcon’s bottom line for the to-be-reported quarter is pegged at 71 cents per share, suggesting a 1.4% year-over-year increase. The consensus estimate for ALC’s revenues is pegged at $2.5 billion, predicting a 5.4% increase from the year-ago period.
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Will Rate Hikes Aid Hartford Financial's (HIG) Q1 Earnings?
The Hartford Financial Services Group, Inc. (HIG - Free Report) is scheduled to release first-quarter 2024 results on Apr 25, 2024, after the closing bell.
What Do the Estimates Say?
The Zacks Consensus Estimate for Hartford Financial’s first-quarter earnings per share is pegged at $2.43, which indicates an improvement of 44.6% from the prior-year quarter’s reported figure. The consensus mark for revenues is $4.4 billion, suggesting 11.8% growth from the year-ago quarter’s reported number.
Hartford Financial’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 11.8%. This is depicted in the chart below:
The Hartford Financial Services Group, Inc. Price and EPS Surprise
The Hartford Financial Services Group, Inc. price-eps-surprise | The Hartford Financial Services Group, Inc. Quote
What Our Quantitative Model Unveils
Our proven model predicts an earnings beat for Hartford Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Hartford Financial has an Earnings ESP of +0.81% because the Most Accurate Estimate of $2.45 is pegged higher than the Zacks Consensus Estimate of $2.43. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HIG carries a Zacks Rank of 3.
Before we get into what to expect for the to-be-reported quarter in detail, it is worth taking a look at HIG’s fourth-quarter performance.
Q4 Earnings Rewind
In the fourth quarter of 2023, adjusted operating earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate by 28%. The quarterly results were aided by improved property and casualty (P&C) earned premiums and a year-over-year decline in catastrophe losses. Fully insured ongoing premiums in the Group Benefits business also contributed to the sound performance.
Now, let us see how things have shaped up prior to the first-quarter earnings announcement.
Factors at Play
Hartford Financial’s revenues are expected to have benefited due to improved premiums across its Commercial Lines, Personal Lines and Group Benefits businesses in the first quarter. The Zacks Consensus Estimate for overall earned premiums is $5.5 billion, which indicates an improvement of 9.6% year over year.
Persistent rate increases, new business growth, expanding policies in force and higher retention rates are expected to have benefited the Commercial Lines business in the to-be-reported quarter. Expanding underlying margins is expected to aid this business. However, the upside is likely to have been partly offset by the ongoing headwinds in the workers’ compensation market, barring which, the remainder of Commercial Lines is expected to be higher than loss cost trends. The Zacks Consensus Estimate expects Commercial Lines’ earned premiums to improve 12% year over year to $3.1 billion in the first quarter.
The Personal Lines business is expected to have benefited on the back of renewal written price increases in the first quarter. The homeowners’ insurance business is likely to have been aided by favorable net rates and insured value increases. Moderating severity trends coupled with rising rates are expected to drive underlying loss ratio improvement in the quarter for the Auto insurance business. However, HIG has a long road ahead to return this business to targeted profitability.
The Zacks Consensus Estimate for earned premiums of the Personal Lines unit is $808 million, which implies a 9.3% rise from the prior-year quarter’s reported number.
The Group Benefits business is expected to have been driven by higher premiums, solid sales, improved mortality trends and long-term disability results in the to-be-reported quarter. The Zacks Consensus Estimate for earned premiums of the segment is $1.6 billion, which indicates an improvement of 5.1% from the prior-year quarter’s reported figure.
Additionally, increased returns from the fixed-income portfolio of Hartford Financial, attributable to higher interest rates, are likely to have aided its first-quarter investment results.
However, the company’s bottom line is expected to have suffered a blow due to escalating benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. HIG’s margins are also likely to have been hurt by expenses linked with investments to boost digital, analytics and data science capabilities.
Other Stocks to Consider
Here are some companies from the broader Finance space that you may want to consider, as our model shows that these, too, have the right combination of elements to post an earnings beat this time around:
CleanSpark, Inc. (CLSK - Free Report) has an Earnings ESP of +63.64% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CleanSpark’s bottom line for the to-be-reported quarter is pegged at 6 cents per share, indicating a 126.1% improvement from the year-ago period. The consensus estimate for CLSK’s revenues is pegged at $103.8 million, suggesting a 143.9% increase from a year ago.
Mr. Cooper Group Inc. (COOP - Free Report) has an Earnings ESP of +1.90% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Mr. Cooper Group’s bottom line for the to-be-reported quarter is pegged at $2.11 per share, indicating 80.3% year-over-year growth. The estimate remained stable over the past week. The consensus estimate for COOP’s revenues is pegged at $493.9 million, suggesting a 49.7% increase from a year ago.
Alcon Inc. (ALC - Free Report) has an Earnings ESP of +2.20% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Alcon’s bottom line for the to-be-reported quarter is pegged at 71 cents per share, suggesting a 1.4% year-over-year increase. The consensus estimate for ALC’s revenues is pegged at $2.5 billion, predicting a 5.4% increase from the year-ago period.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.