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Chubb Limited (CB), a leading player in the property and casualty insurance sector with a market cap of $111 billion, offers a wide array of insurance and reinsurance products globally. Based in Zurich, Switzerland, the company serves diverse commercial, personal, and agricultural needs with a strong emphasis on financial strength and extensive product offerings.
Shares of the insurance giant have outperformed the broader market over the past 52 weeks. CB has surged 35.3% during this period, contrasting with the S&P 500 Index's ($SPX) rally of 26.1%. In 2024, CB shares gained nearly 21%, compared to SPX's 16.5% returns on a YTD basis.
Zooming in further, CB's performance surpasses the U.S. Insurance iShares ETF (IAK), which has recorded gains of 34% over the past 52 weeks.
Chubb has outperformed due to its consistent underwriting profits and strategic acquisitions, such as Cigna's Asia business. Effective share repurchases and robust financial management have also enhanced its performance and shareholder returns. However, despite surpassing Q2 earnings estimates on Jul. 23, Chubb’s shares fell 1.2% the following day due to market concerns about the sustainability of its high investment returns and the potential impact of future interest rate changes.
For the current fiscal year, ending in December, analysts expect CB's EPS to decline 6.1% year over year to $21.16 per share. Nevertheless, the company's earnings surprise history is promising. It topped the consensus estimates in all of the last four quarters.
The consensus rating among the 22 analysts covering the stock is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, two “Moderate Buys,” 10 “Holds,” and one “Strong Sell.”
This configuration is more bullish than three months ago, with seven analysts suggesting a "Strong Buy."
On Jul. 24, BofA analyst Joshua Shanker raised Chubb's price target to $264 and maintained a "Neutral" rating, citing the company's strong Q2 earnings performance driven by lower catastrophe losses and higher investment income.
The mean price target of $278.19 represents a premium of just 1.7% to CB's current price levels. The Street-high price target of $305 implies a modest potential upside of 11.6%.
On the date of publication, Sohini Mondal 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.
