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Cincinnati Financial Corp. (CINF)
NASDAQ:CINF
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Cincinnati Financial
(NASDAQ:CINF)78Outperform
Positive Factors
Financial Performance
Lower-than-expected catastrophe losses provided a tailwind to the company's financial results.
Revenue Growth
CINF has a high-single-digit long-term revenue growth runway profile.
Negative Factors
Earnings Impact
CINF's 2025 earnings per share estimate falls 29% following California wildfire exposure loss of $450-525M.
Cincinnati Financial (CINF) vs. S&P 500 (SPY)
Market Cap
$23.14B
Dividend Yield2.2%
Average Volume (3M)792.63K
Price to Earnings (P/E)10.2
Beta (1Y)0.43
Revenue Growth13.22%
EPS Growth24.83%
CountryUS
Employees5,426
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)14.52
Shares Outstanding156,523,960
10 Day Avg. Volume724,056
30 Day Avg. Volume792,632
Financial Highlights & Ratios
PEG Ratio0.41
Price to Book (P/B)N/A
Price to Sales (P/S)2.05
Price to Cash Flow (P/CF)9.00
P/FCF Ratio8.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$157.80Price Target Upside10.15% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Cincinnati Financial Business Overview & Revenue Model
Company DescriptionCincinnati Financial Corporation (CINF) is a prominent insurance holding company based in Fairfield, Ohio. It primarily operates through its subsidiaries, offering a diverse range of insurance products and services across several sectors, including property and casualty insurance, life insurance, and excess and surplus lines insurance. The company is known for its comprehensive portfolio that caters to both personal and commercial clients, with a strong emphasis on superior claims service and financial stability.
How the Company Makes MoneyCincinnati Financial makes money primarily through the underwriting of insurance policies and investment income. Its revenue streams are largely derived from the premiums collected on various insurance products, including personal lines like homeowners and auto insurance, as well as commercial lines such as property, liability, and workers' compensation insurance. Another significant source of income for the company is investment income, earned from managing the premiums collected until claims are paid out. This includes investments in stocks, bonds, and other financial instruments. Additionally, Cincinnati Financial benefits from agency relationships, leveraging a network of independent agents to distribute its products and expand its market reach. The company's financial performance is also influenced by its disciplined underwriting practices and prudent risk management, ensuring profitability and long-term growth.
Cincinnati Financial Financial Statement Overview
Summary
Cincinnati Financial demonstrates strong revenue growth and profitability, shown by a 13.2% revenue increase and improved net profit margin. The balance sheet highlights low leverage with a debt-to-equity ratio of 0.06, though a decline in cash indicates potential liquidity concerns. Cash flow is robust with a 30.2% increase in free cash flow, despite negative investing cash flow indicating ongoing investments.Income Statement
Cincinnati Financial has demonstrated strong revenue growth with a 13.2% increase from 2023 to 2024. The net profit margin improved significantly from 18.4% in 2023 to 20.2% in 2024, indicating enhanced profitability. The absence of EBIT and EBITDA in 2024 might raise concerns about operational performance measurement, but the strong net income compensates for this gap.88
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.06 in 2024, showing strong leverage management. Stockholders' equity has increased, supporting a solid equity ratio of 38.2%. However, the decrease in total cash and short-term investments could indicate potential liquidity risks.75
Positive
Cash Flow
Free cash flow increased by 30.2% from 2023 to 2024, emphasizing efficient cash management. The operating cash flow to net income ratio of 1.16 indicates strong cash generation relative to net income. Although free cash flow is robust, the investing cash flow remains negative, signaling ongoing investments or capital expenditures.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.15B | 11.34B | 10.01B | 6.56B | 9.63B | 7.54B | Gross Profit |
| 7.15B | 11.34B | 10.01B | 6.56B | 9.63B | 7.54B | EBIT |
| 679.00M | 0.00 | 2.33B | -641.00M | 3.75B | 1.55B | EBITDA |
| 781.00M | 0.00 | 2.44B | -514.00M | 3.84B | 1.63B | Net Income Common Stockholders |
| 532.00M | 2.29B | 1.84B | -486.00M | 2.97B | 1.22B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 983.00M | 983.00M | 907.00M | 1.26B | 1.14B | 900.00M | Total Assets |
| 36.50B | 36.50B | 32.77B | 29.74B | 31.39B | 27.54B | Total Debt |
| 850.00M | 850.00M | 874.00M | 891.00M | 897.00M | 899.00M | Net Debt |
| -133.00M | -133.00M | -33.00M | -373.00M | -242.00M | -1.00M | Total Liabilities |
| 22.57B | 22.57B | 20.67B | 19.20B | 18.28B | 16.75B | Stockholders Equity |
| 13.94B | 13.94B | 12.10B | 10.53B | 13.11B | 10.79B |
| Cash Flow | Free Cash Flow | ||||
| 1.80B | 2.65B | 2.03B | 2.04B | 1.97B | 1.47B | Operating Cash Flow |
| 1.82B | 2.65B | 2.05B | 2.05B | 1.98B | 1.49B | Investing Cash Flow |
| -855.00M | -1.70B | -1.61B | -933.00M | -1.06B | -560.00M | Financing Cash Flow |
| -869.00M | -877.00M | -801.00M | -994.00M | -685.00M | -798.00M |
Cincinnati Financial Technical Analysis
Positive
143.26
Price Trends
139.94
Positive
143.25
Positive
133.64
Positive
Market Momentum
1.34
Negative
56.14
Neutral
79.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CINF, the sentiment is Positive. The current price of 143.26 is above the 20-day moving average (MA) of 138.72, above the 50-day MA of 139.94, and above the 200-day MA of 133.64, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 56.14 is Neutral, neither overbought nor oversold. The STOCH value of 79.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CINF.
Cincinnati Financial Risk Analysis
Cincinnati Financial disclosed 20 risk factors in its most recent earnings report. Cincinnati Financial reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cincinnati Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $23.14B | 10.18 | 16.45% | 2.20% | 13.22% | 24.83% | |
78 Outperform | $113.78B | 12.52 | 14.48% | 1.24% | 11.78% | 4.39% | |
77 Outperform | $23.92B | 14.48 | 20.92% | 0.49% | 12.32% | 29.21% | |
75 Outperform | $58.61B | 12.04 | 17.94% | 1.59% | 12.23% | 68.50% | |
74 Outperform | $166.01B | 19.67 | 33.14% | 1.72% | 21.36% | 118.77% | |
72 Outperform | $53.55B | 11.89 | 21.77% | 1.82% | 12.28% | ― | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
CINF
Cincinnati Financial
143.26
34.12
31.26%
CB
Chubb
284.15
38.07
15.47%
ALL
Allstate
199.03
44.58
28.86%
PGR
Progressive
283.19
97.21
52.27%
TRV
Travelers Companies
255.70
40.48
18.81%
WRB
W. R. Berkley Corporation
62.23
7.55
13.81%
Cincinnati Financial Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: 5.63% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call presented strong financial results with significant growth in operating income, premium growth, and investment income, along with improvements in combined ratios. However, the impact of the California wildfires and unfavorable investment portfolio valuations presented challenges. Overall, the highlights significantly outweigh the lowlights, indicating a positive sentiment.Highlights
Strong Financial Performance
Operating income increased 38% for the fourth quarter and 26% for the full year 2024. Net income rose 24% for the year.
Improved Combined Ratios
The fourth quarter property casualty combined ratio improved by 2.8 percentage points to 84.7%, with the full year combined ratio at 93.4%, an improvement of 1.5 percentage points compared to 2023.
Significant Premium Growth
Consolidated property casualty net written premiums grew 17% for the quarter, including 15% growth in agency renewal premiums and 23% in new business premiums.
Investment Income Increase
Investment income grew 17% for the fourth quarter and 15% for the full year 2024, with interest income increasing 28% for the fourth quarter.
Capital Management Success
For full year 2024, $490 million was returned to shareholders through dividends paid, along with share repurchases. The book value reached a record high of $89.11 per share.
Value Creation Ratio Achievement
The company's value creation ratio reached 19.8% on a full-year basis, exceeding the target of 10 to 13% on a five-year average.
Lowlights
Impact of California Wildfires
Estimated first quarter 2025 pretax catastrophe losses are approximately $450 to $525 million net of reinsurance recoveries due to the California wildfires.
Net Loss in Investment Portfolio
Fourth quarter valuation changes were unfavorable for both the equity portfolio ($136 million loss) and the bond portfolio ($350 million loss).
Continued Pressure in Workers' Compensation
Workers' compensation line of business is experiencing pricing below loss cost trends.
Company Guidance
During the Cincinnati Financial Corporation's fourth quarter and full year 2024 earnings call, several key financial metrics were highlighted. Net income for the fourth quarter was $405 million, with a noted unfavorable swing of $931 million compared to the previous year due to changes in the fair value of equity securities. The company also reported a significant 38% increase in non-GAAP operating income for the quarter, reaching $497 million, and a 26% rise for the full year. The property casualty combined ratio for the fourth quarter improved by 2.8 percentage points to 84.7%, contributing to a full-year combined ratio of 93.4%, which was 1.5 points better than in 2023. The company experienced strong premium growth across its segments, with consolidated property casualty net written premiums increasing by 17% for the quarter. The company estimated first-quarter 2025 pre-tax catastrophe losses from California wildfires at $450 to $525 million, net of reinsurance recoveries. Investment income also saw growth, reaching $1 billion for the year, with a 15% increase compared to the prior year.Cincinnati Financial Corporate Events
Financial Disclosures
Cincinnati Financial Reports Mixed 2024 Financial Results
Neutral
Feb 10, 2025
Cincinnati Financial Corporation reported its fourth-quarter and full-year 2024 financial results on February 10, 2025. For the fourth quarter of 2024, the company saw a significant decline in net income to $405 million from $1.183 billion in the same period the previous year, mainly due to a decrease in after-tax net investment gains. However, the full-year 2024 net income increased by 24% to $2.292 billion, supported by a 26% rise in non-GAAP operating income and improvements in underwriting profit and investment income. The company also reported growth in its book value per share and maintained a strong property casualty combined ratio.
DividendsFinancial Disclosures
Cincinnati Financial Raises Dividend Amidst Challenges
Positive
Jan 31, 2025
On January 31, 2025, Cincinnati Financial Corporation announced an increase in its regular quarterly cash dividend to 87 cents per share, a 7% rise from the previous dividend. This decision reflects the board’s confidence in the company’s financial strength, despite the material impact of recent California wildfires on first-quarter earnings. The company remains committed to meeting insurance obligations and maintaining long-term shareholder value.
Executive/Board ChangesBusiness Operations and Strategy
Cincinnati Financial Restructures Leadership for Future Growth
Positive
Dec 12, 2024
Cincinnati Financial Corporation is restructuring its insurance operations to drive continued success by promoting experienced leaders to key positions starting January 1, 2025. This move aims to support profitable growth by aligning leadership with the company’s strategic focus on commercial/life and personal/specialty insurance operations, enhancing efficiency, and strengthening relationships with independent agents, ultimately benefiting stakeholders and shareholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.