Are Wall Street Analysts Predicting Chubb Stock Will…

Are Wall Street Analysts Predicting Chubb Stock Will Climb or Sink?

Switzerland-based Chubb Limited (CB) provides insurance and reinsurance products. Valued at a market cap of $116.1 billion, the company provides commercial, personal property, and casualty insurance, personal accident and supplemental health insurance, reinsurance, and life insurance to a diverse group of clients.

Shares of this insurance company have lagged behind the broader market over the past 52 weeks. CB has gained 28.7% over this time frame, while the broader S&P 500 Index ($SPX) has soared 30.4%. Nevertheless, shares of CB are up 26.1% on a YTD basis, outperforming the SPX’s 23.1% gain.

Zooming in further, CB has underperformed the Financial Select Sector SPDR Fund’s (XLF) nearly 42% gain over the past 52 weeks and 32.2% return on a YTD basis.

Shares of CB plunged 1.2% after the company dropped its mixed Q3 earnings release on Oct. 29. The insurer posted a 6.6% year-over-year revenue growth to $15 billion yet fell short of Wall Street's expectations. However, the real highlight was its core operating income, which surged 15.6% to $5.72 per share, outpacing analyst estimates by an impressive 16% margin. Furthermore, Chubb's results were overshadowed by higher catastrophe losses, which dampened the impact of its otherwise solid performance in North America P&C, Overseas General, and Life Insurance divisions.

For the current fiscal year, ending in December, analysts expect CB’s EPS to decline 3.4% year over year to $21.77. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.

Among the 24 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 11 “Strong Buy,” two “Moderate Buy,” nine “Hold,” one “Moderate Sell,” and one "Strong Sell” ratings. This configuration is more bullish than three months ago, with ten analysts suggesting a “Strong Buy.”

On Nov. 6, Wells Fargo maintained an “Equal Weight” rating on CB and raised the price target to $268. However, the stock has already blown past this freshly raised target.

The mean price target of $301.22 represents only a 4.5% upside from CB’s current price levels. The Street-high price target of $349 suggests an upside potential of 21.1%.

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On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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