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Cincinnati Financial Corp. (CINF)
NASDAQ:CINF

Cincinnati Financial (CINF) AI Stock Analysis

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Cincinnati Financial

(NASDAQ:CINF)

Rating:73Outperform
Price Target:
$165.00
â–˛(12.21%Upside)
Cincinnati Financial's overall stock score reflects its solid financial foundation, characterized by a strong balance sheet and effective cash flow management. Technical indicators show stable market momentum, and valuation metrics suggest the stock is fairly priced with potential for income generation through dividends. The strategic initiatives highlighted in recent corporate events further bolster future growth prospects.
Positive Factors
Earnings
The 1Q25 result came in better than the forecast of an $0.89/sh loss and consensus at a $0.64/sh loss, mainly due to lower-than-expected catastrophe losses.
Valuation
CINF's valuation now screens as relatively inexpensive with a P/E ratio of ~11x, indicating potential for future growth.
Negative Factors
Stock Market Performance
Shares of CINF have been negatively impacted by the YTD decline in the stock market, leading to a 7% decrease in share value.
Wildfire Impact
The California Wildfire exposure led to a significant estimated loss for CINF, affecting their 2025 EPS estimate.

Cincinnati Financial (CINF) vs. SPDR S&P 500 ETF (SPY)

Cincinnati Financial Business Overview & Revenue Model

Company DescriptionCincinnati Financial Corporation, together with its subsidiaries, provides property casualty insurance products in the United States. The company operates through five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment offers coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also provides director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; and machinery and equipment coverage. The Personal Lines Insurance segment offers personal auto insurance; homeowner insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to various causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life; and whole life insurance products. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.
How the Company Makes MoneyCincinnati Financial makes money primarily through the underwriting of insurance policies and investment income. The company's revenue streams include premiums collected from policyholders in exchange for coverage against various risks. The underwriting process involves assessing risks, determining appropriate pricing, and issuing policies that align with the company's risk management strategies. Additionally, Cincinnati Financial generates income from its investment portfolio, which consists of bonds, stocks, and other financial instruments. The company strategically invests the premiums it collects to earn returns that contribute significantly to its profitability. Partnerships with independent insurance agencies play a crucial role in distributing Cincinnati Financial's products and expanding its market reach, thereby enhancing revenue generation.

Cincinnati Financial Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q4-2024)
|
% Change Since: 8.23%|
Next Earnings Date:Jul 23, 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.
Q4-2024 Updates
Positive Updates
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.
Negative Updates
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 Financial Statement Overview

Summary
Cincinnati Financial shows solid financial health with a strong balance sheet and robust cash flow metrics. The low debt-to-equity ratio and strong cash flow conversion are notable strengths. However, challenges in revenue growth and profitability, evidenced by declining margins and revenue, are areas for improvement.
Income Statement
65
Positive
Cincinnati Financial exhibits a moderate performance with a current TTM gross profit margin of 100% due to zero cost structure in the insurance sector. The net profit margin for the TTM is 13.2%, lower than the previous annual period of 20.2%, indicating margin compression. Revenue has decreased by 3.25% in the TTM compared to the last annual report, showing challenges in revenue growth. The EBIT margin in the TTM stands at 17.5%, down from 25.2% annually, suggesting pressure on operational efficiency.
Balance Sheet
78
Positive
Cincinnati Financial maintains a strong balance sheet with a low debt-to-equity ratio of 0.062 in the TTM, reflecting prudent leverage management. The equity ratio has improved to 36.8%, indicating a solid capital structure. Return on equity has seen a decline to 10.5% in the TTM from 16.4%, highlighting reduced profitability relative to shareholder equity.
Cash Flow
82
Very Positive
The company's cash flow generation is robust, with a stable operating cash flow to net income ratio of 1.8 in the TTM. Free cash flow growth rate shows a slight decline of 2.19%, yet free cash flow remains strong at $2.59 billion. The free cash flow to net income ratio is high at 1.79, indicating effective cash conversion from net income.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
10.97B11.34B10.01B6.56B9.63B7.54B
Gross Profit
10.97B11.34B10.01B6.56B9.63B7.54B
EBIT
1.79B2.91B2.33B-641.00M3.72B1.55B
EBITDA
1.97B2.91B2.44B-514.00M3.82B0.00
Net Income Common Stockholders
1.45B2.29B1.84B-487.00M2.97B1.22B
Balance SheetCash, Cash Equivalents and Short-Term Investments
767.00M983.00M907.00M1.26B1.14B900.00M
Total Assets
25.41B36.50B32.77B29.73B31.39B27.54B
Total Debt
885.00M875.00M874.00M891.00M897.00M899.00M
Net Debt
118.00M-108.00M-33.00M-373.00M-242.00M-1.00M
Total Liabilities
15.54B22.57B20.67B19.17B18.28B16.75B
Stockholders Equity
9.86B13.94B12.10B10.56B13.11B10.79B
Cash FlowFree Cash Flow
2.59B2.63B2.03B2.04B1.97B1.47B
Operating Cash Flow
2.61B2.65B2.05B2.05B1.98B1.49B
Investing Cash Flow
-1.40B-1.70B-1.61B-933.00M-1.06B-560.00M
Financing Cash Flow
-816.00M-877.00M-801.00M-994.00M-685.00M-798.00M

Cincinnati Financial Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price147.05
Price Trends
50DMA
142.47
Positive
100DMA
141.20
Positive
200DMA
141.11
Positive
Market Momentum
MACD
1.70
Positive
RSI
49.39
Neutral
STOCH
49.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CINF, the sentiment is Neutral. The current price of 147.05 is below the 20-day moving average (MA) of 149.08, above the 50-day MA of 142.47, and above the 200-day MA of 141.11, indicating a neutral trend. The MACD of 1.70 indicates Positive momentum. The RSI at 49.39 is Neutral, neither overbought nor oversold. The STOCH value of 49.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CINF.

Cincinnati Financial Risk Analysis

Cincinnati Financial disclosed 18 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
WRWRB
82
Outperform
$28.16B17.2120.73%0.44%11.39%14.76%
MKMKL
73
Outperform
$24.91B14.3210.94%―-6.46%-26.71%
73
Outperform
$23.61B16.4810.97%2.21%2.44%-38.76%
CNCNA
70
Outperform
$12.36B13.928.98%3.87%6.34%-28.19%
AFAFG
66
Neutral
$10.34B13.0118.51%2.50%3.76%-9.12%
LL
66
Neutral
$18.69B14.647.95%0.28%9.02%-9.73%
64
Neutral
$12.83B9.787.78%16985.64%12.26%-7.81%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CINF
Cincinnati Financial
147.05
36.14
32.58%
AFG
American Financial Group
123.85
6.72
5.74%
CNA
CNA Financial
45.69
5.03
12.37%
L
Loews
88.15
13.71
18.42%
MKL
Markel
1,926.62
369.58
23.74%
WRB
W. R. Berkley Corporation
71.80
20.94
41.17%

Cincinnati Financial Corporate Events

Business Operations and StrategyFinancial Disclosures
Cincinnati Financial Releases New Investor Presentation
Neutral
May 27, 2025

On May 27, 2025, Cincinnati Financial Corporation released presentation slides for investor presentations starting May 28, 2025. The slides highlight the company’s strategic focus on premium growth, investment income, and maintaining a competitive combined ratio. Despite a challenging first quarter in 2025, with a negative EPS and increased catastrophe losses, the company reported growth in net written premiums and investment income. Cincinnati Financial aims to enhance profitability through underwriting expertise, predictive modeling, and strategic investments, while expanding its market presence through new agency appointments and product offerings.

The most recent analyst rating on (CINF) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Cincinnati Financial stock, see the CINF Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Cincinnati Financial Holds Annual Shareholders’ Meeting
Neutral
May 7, 2025

On May 3, 2025, Cincinnati Financial Corporation held its annual shareholders’ meeting where all directors were elected for one-year terms to the 13-member board. Shareholders approved the Amended and Restated Articles of Incorporation, executive compensation, and ratified Deloitte & Touche LLP as the independent registered public accounting firm for 2025. The board emphasized its commitment to increasing shareholder value with a diverse and skilled group of directors guiding long-term strategic plans.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.