CNA Financial (CNA) AI Stock Analysis

• Market Cap: $12.30B
• Dividend Yield: 4.03%
• Average Volume (3M): 292.86K
• Price to Earnings (P/E): 13.8
• Beta (1Y): 0.25
• Revenue Growth: 6.34%
• EPS Growth: -28.19%
• Country: US
• Employees: 6,500
• Sector: Financial
• Sector Strength: 74
• Industry: Insurance - Property & Casualty
• EPS (TTM): 1.03
• Shares Outstanding: 270,621,860
• 10 Day Avg. Volume: 367,631
• 30 Day Avg. Volume: 292,859
• PEG Ratio: 0.00
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.69
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 0.24
• Enterprise Value/Gross Profit: 1.01
• Enterprise Value/Ebitda: 2.28
• 1Y Price Target: $45.00
• Price Target Upside: -0.99% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 70 Outperform
• Price Target: $52.00 ▲(14.41%Upside)

CNA Financial exhibits solid financial performance and effective cash management, which are the most significant strengths. The stock is fairly valued with an attractive dividend yield, though technical indicators show a lack of momentum. Overall, the company demonstrates financial health with room for improvement in profitability.

Positive Factors

Premium Growth

Total P&C net written premium growth of 9% remained robust and came ahead of the forecast, indicating strong performance in this area.

Underwriting Margins

Favorable P&C underwriting margins contributed to the outperformance compared to projections.

Negative Factors

Legacy Claims

A $17mn reserve charge related to legacy mass tort abuse claims in Corporate & Other is notable, following multiple charges in previous quarters, with expectations of a material reserve charge in the future.

Reserve Development

The adverse development in the Commercial segment, with a reserve development of $53mn, compares unfavorably to estimates and raises concerns about elevated bodily injury loss cost trends in commercial auto.

Warranty Claims

Higher frequency of warranty claims in the Specialty segment led to adverse development of $10mn, which is worse than expected and linked to vehicle owners keeping their vehicles longer post-pandemic.

CNA Financial Business Overview & Revenue Model

Company Description

CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It operates through Specialty, Commercial, International, Life & Group, and Corporate & Other segments. The company offers professional liability coverages and risk management services to various professional firms, including architects, real estate agents, and accounting and law firms; directors and officers, employment practices, fiduciary, and fidelity coverages to small and mid-size firms, public and privately held firms, and not-for-profit organizations; professional and general liability, as well as associated standard property and casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. It also provides property insurance products, such as property, marine, boiler, and machinery coverages; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, and umbrella coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term care policies. In addition, the company offers long-tail exposures comprising commercial automobile liability, workers' compensation, general and medical professional liability, other professional and management liability, and assumed reinsurance run-off and products liability; and short-tail exposures, such as property, commercial automobile physical damage, marine, and surety. It markets its products through independent agents, brokers, and general underwriters to small, medium, and large businesses; insurance companies; associations; professionals; and other groups in the marine, oil and gas, construction, manufacturing, life science, property, financial services, healthcare, and technology industries. The company was founded in 1853 and is headquartered in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

How the Company Makes Money

CNA Financial makes money primarily through underwriting insurance policies and investing the premiums collected from these policies. The company's key revenue streams include the sale of property and casualty insurance products, which generate premium income. CNA also earns investment income from the premiums it holds before claims are paid out, investing these funds in a diversified portfolio of bonds, equities, and other financial instruments. Additionally, CNA's strong network of agents and brokers facilitates the distribution of its insurance products, contributing to its revenue. Strategic partnerships and collaborations with reinsurers and other financial entities further enhance CNA's risk management capabilities, supporting its profitability.

CNA Financial Financial Statement Overview

Summary

CNA Financial demonstrates solid revenue growth and effective cash management. While profitability has faced some pressure, operational efficiency remains robust. The balance sheet reflects a stable financial position with manageable leverage levels.

Income Statement

The company has demonstrated solid revenue growth, with a 6.73% increase from 2023 to the TTM period. Gross profit margin remains strong at 94.78% for the TTM, indicating efficient cost control. However, the net profit margin has decreased to 6.76% in the TTM, suggesting pressure on profitability. EBIT and EBITDA margins are healthy at 9.09% and 25.33%, respectively, showing good operational efficiency.

Balance Sheet

CNA Financial's balance sheet shows a moderate debt-to-equity ratio of 0.28, indicating manageable leverage levels. The equity ratio is 15.81%, suggesting a stable capital structure. However, the return on equity is relatively low at 9.12%, reflecting moderate returns on shareholder investments.

Cash Flow

The company exhibits strong cash flow performance, with a 12.81% growth in free cash flow from 2023 to the TTM period. The operating cash flow to net income ratio of 2.68 indicates robust cash generation relative to net income. Additionally, the free cash flow to net income ratio is high at 2.58, underscoring effective cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
14.38B	14.00B	13.30B	11.89B	11.55B	11.91B
	Gross Profit
13.64B	14.00B	13.13B	11.89B	11.55B	11.91B
	EBIT
850.00M	1.21B	13.30B	814.00M	1.46B	30.00M
	EBITDA
933.00M	1.41B	1.72B	977.00M	1.63B	1.00B
	Net Income Common Stockholders
895.00M	959.00M	1.21B	682.00M	1.18B	1.20B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.07B	2.56B	2.51B	2.31B	2.31B	2.53B
	Total Assets
67.33B	66.49B	64.71B	60.93B	48.55B	54.15B
	Total Debt
2.97B	2.97B	3.03B	2.78B	2.78B	2.78B
	Net Debt
2.49B	2.50B	2.69B	2.31B	2.31B	2.24B
	Total Liabilities
57.05B	55.98B	54.82B	52.10B	52.10B	7.28B
	Stockholders Equity
10.28B	10.51B	9.89B	8.82B	-3.56B	320.00M
Cash Flow		Free Cash Flow
2.61B	2.48B	2.19B	2.45B	2.45B	1.97B
	Operating Cash Flow
2.71B	2.57B	2.29B	2.50B	2.50B	2.00B
	Investing Cash Flow
-980.00M	-1.32B	-1.84B	-1.51B	-1.51B	-1.23B
	Financing Cash Flow
-1.65B	-1.12B	-577.00M	-1.03B	-1.03B	-648.00M

CNA Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 45.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNA, the sentiment is Negative. The current price of 45.45 is below the 20-day moving average (MA) of 47.07, below the 50-day MA of 47.28, and below the 200-day MA of 46.69, indicating a bearish trend. The MACD of -0.55 indicates Positive momentum. The RSI at 35.81 is Neutral, neither overbought nor oversold. The STOCH value of 12.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CNA.

CNA Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXS	82 Outperform	$8.13B	10.13	15.43%	1.70%	6.76%	54.56%
THG	79 Outperform	$6.09B	14.12	15.74%	2.12%	3.09%	168.29%
RLI	72 Outperform	$6.68B	23.95	17.99%	0.88%	9.18%	-16.06%
SIGI	71 Outperform	$5.18B	23.25	7.48%	1.78%	13.37%	-35.09%
CNA	70 Outperform	$12.30B	13.85	8.98%	4.03%	6.34%	-28.19%
AFG	66 Neutral	$10.35B	13.02	18.51%	7.74%	3.76%	-9.12%
Sector *	64 Neutral	$12.87B	9.76	7.85%	78.04%	12.07%	-7.94%