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Fairfield, Ohio-based Cincinnati Financial Corporation (CINF) provides property casualty insurance products. Valued at $22.7 billion by market cap, the company markets a variety of insurance products and provides leasing and financing services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CINF perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the proper & casualty insurance industry.
Despite its notable strength, CINF slipped 10.2% from its 52-week high of $161.75, achieved on Nov. 27. Over the past three months, CINF stock has gained 6.7%, outperforming the Invesco KBW Property & Casualty Insurance ETF’s (KBWP) marginal gains during the same time frame.
In the longer term, shares of CINF rose 24.6% over the past six months and climbed 42.6% over the past 52 weeks, outperforming KBWP’s six-month gains of 11.8% and solid 30.1% returns over the last year.
To confirm the bullish trend, CINF has been trading above its 200-day moving average over the past year. However, despite the positive price momentum, the stock is trading below its 50-day moving average recently.
CINF's strong performance can be attributed to a growth in net written premiums, driven by price increases and higher insured exposures, along with a rise in investment income from increased bond interest. Investors are also optimistic about the insurance industry's adoption of technology and insurtech, which will lead to smoother operations for industry players.
On Oct. 24, CINF shares closed down marginally after reporting its Q3 results. Its adjusted EPS of $1.42 missed Wall Street expectations of $1.46. The company’s revenue stood at $3.3 billion, up 83.3% year over year.
CINF’s rival, The Travelers Companies, Inc. (TRV) shares lagged behind the stock, with a 15.1% uptick over the past six months and 30.7% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on CINF’s prospects. The stock has a consensus “Moderate Buy” rating from the 10 analysts covering it, and the mean price target of $151.62 suggests a potential upside of 4.4% from current price levels.
