Chubb Limited (NYSE:CB) is scheduled to report Q3 earnings results after markets close for trading on October 27, 2020.
The company is expected to report earnings of $2.26/share on revenue of $8.17 billion. The consensus earnings per share (EPS) of $2.26/share is based on a poll of 19 analysts and represents a decline in eps of −16.2% over the same quarter last year, when the company reported earnings of $2.70/share.
The revenue forecast of $8.17 billion based on a poll of 6 analysts implies a year-over-year (YoY) growth in revenue of 2.0%. Last year the company reported $8.01 billion in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $8,169.83 | $8,010.00 | 2.0% |
| EPS | $2.26 | $2.70 | −16.2% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.
What are your expectations from Chubb Limited for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | -$0.39 | -$0.56 | -42.5% | Missed |
| Q1, 2020 | $2.57 | $2.68 | 4.1% | Beat |
| Q4, 2019 | $2.15 | $2.28 | 5.9% | Beat |
| Q3, 2019 | $2.61 | $2.70 | 3.6% | Beat |
| Q2, 2019 | $2.56 | $2.60 | 1.5% | Beat |
| Q1, 2019 | $2.56 | $2.54 | −0.8% | Missed |
| Q4, 2018 | $2 | $2.02 | 0.8% | Beat |
| Q3, 2018 | $2.36 | $2.41 | 1.9% | Beat |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 28, 2020 | $132.39 | $131.94 | −0.3% | Decline |
| April 21, 2020 | $114.64 | $106.22 | −7.3% | Decline |
| February 4, 2020 | $153.23 | $165.33 | 7.9% | Increase |
| October 29, 2019 | $148.24 | $153.37 | 3.5% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.48, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.48 implies a 0.7% chance of earnings manipulation.
Fundamentals And Technical Analysis
Chubb Limited is currently trading at $119.30/share, up 2.0% for the day. The company is trading at approximately 71.1% of its 52-week high of $167.74/share. The company’s stock price is down −9.6% since the last earnings report and up 0.6% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 47.50 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 24.64 and a forward P/E multiple of 16.58.
Chubb Limited’s current share price also implies a price-to-book (P/B) multiple of 0.98. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $119.30 |
| P/E Ratio | 24.6x |
| P/E Ratio (Fwd) | 16.6x |
| PEG Ratio | −0.6 |
| Total Debt / Total Capital | 26.5% |
| Levered Free Cash Flow | $7.331 billion |
| EV / EBITDA | −11.2x |
Chubb Limited is a large-cap stock with a market capitalization of $53.848 billion and a total enterprise value of $71.327 billion. The company operates in the Financials sector and the Insurance industry.
Chubb Limited, through its subsidiaries, provides insurance and reinsurance products worldwide. The company’s North America Commercial P&C Insurance segment offers commercial property, marine, casualty, workers’ compensation, package policies, risk management, professional lines, marine, construction, environmental, medical, cyber risk, surety, and excess casualty; and group accident and health insurance to large, middle market, and small commercial businesses in the United States, Canada, and Bermuda. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services in the United States and Canada. The company’s North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm and ranch property, and commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction risk; and group accident and health, and traditional and specialty personal lines for corporations, middle markets, and small customers through retail brokers, agents, and other channels. The company’s Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand name to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual term life, group term life, medical and health, personal accident, credit life, universal life, and unit linked contracts. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was founded in 1985 and is headquartered in Zurich, Switzerland.
