We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should American Financial (AFG) Stock Be in Your Portfolio?
Read MoreHide Full Article
On Aug 19, Zacks Investment Research downgraded American Financial Group Inc. (AFG - Free Report) to a Zacks Rank #3 (Hold).
Why the downgrade?
American Financial Group's second-quarter 2016 net operating earnings of $1.28 per share remained flat year over year. Charges stemming from Neon's (AFG's specialist Lloyd's' market operations was re-launched as Neon Underwriting Ltd.) exited lines of business were a drag on earnings.
Though the company experienced increase in underwriting profit and net investment income in Specialty Property and Casualty (''P&C'') insurance operations in the quarter, the improvement was offset by lower operating earnings in Annuity and Run-off Long-Term Care and Life Segments.
Moreover American Financial has been experiencing hgher expenses over the years. In the second quarter, total cost and expense of $1.4 billion increased 7.7% year over year. Higher losses and expenses in the Property and Casualty (P&C) segment, expenses in Annuity, life, accident & health benefits, costs of managed investment entities and others resulted in the overall increase in expenses.
American Financial's Annuity business somewhat improved in the first half of 2016 after incurring loss in the past several quarters. However, the company now expects annuity earnings to decline $305–$340 million in 2016 as against $315–$360 million guided earlier owing to increased volatility in stock market and interest rate.
Catastrophes loss has historically been a matter of concern for the company. Despite catastrophe mitigation techniques employed by the company, exposure to weather-related calamities makes its earnings volatile. In the second quarter too, the insurer bore the brunt of catastrophe losses of $12 million from April storms in Texas.
Notably, the Zacks Consensus Estimate for 2016 remained unchanged at $5.65 in the last 7 days.
Some better-ranked stocks from the P&C industry are Argo Group International Holdings, Ltd. , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corp. (CINF - Free Report) . While Argo Group International sports a Zacks Rank #1 (Strong Buy), both Arch Capital and Cincinnati Financial hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should American Financial (AFG) Stock Be in Your Portfolio?
On Aug 19, Zacks Investment Research downgraded American Financial Group Inc. (AFG - Free Report) to a Zacks Rank #3 (Hold).
Why the downgrade?
American Financial Group's second-quarter 2016 net operating earnings of $1.28 per share remained flat year over year. Charges stemming from Neon's (AFG's specialist Lloyd's' market operations was re-launched as Neon Underwriting Ltd.) exited lines of business were a drag on earnings.
Though the company experienced increase in underwriting profit and net investment income in Specialty Property and Casualty (''P&C'') insurance operations in the quarter, the improvement was offset by lower operating earnings in Annuity and Run-off Long-Term Care and Life Segments.
Moreover American Financial has been experiencing hgher expenses over the years. In the second quarter, total cost and expense of $1.4 billion increased 7.7% year over year. Higher losses and expenses in the Property and Casualty (P&C) segment, expenses in Annuity, life, accident & health benefits, costs of managed investment entities and others resulted in the overall increase in expenses.
American Financial's Annuity business somewhat improved in the first half of 2016 after incurring loss in the past several quarters. However, the company now expects annuity earnings to decline $305–$340 million in 2016 as against $315–$360 million guided earlier owing to increased volatility in stock market and interest rate.
Catastrophes loss has historically been a matter of concern for the company. Despite catastrophe mitigation techniques employed by the company, exposure to weather-related calamities makes its earnings volatile. In the second quarter too, the insurer bore the brunt of catastrophe losses of $12 million from April storms in Texas.
Notably, the Zacks Consensus Estimate for 2016 remained unchanged at $5.65 in the last 7 days.
AMER FINL GROUP Price and Consensus
AMER FINL GROUP Price and Consensus | AMER FINL GROUP Quote
Stocks to Consider
Some better-ranked stocks from the P&C industry are Argo Group International Holdings, Ltd. , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corp. (CINF - Free Report) . While Argo Group International sports a Zacks Rank #1 (Strong Buy), both Arch Capital and Cincinnati Financial hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7Best Stocks for the Next 30 Days. Click to get this free report >>