Zacks Investment Research Downgrades Chubb (NYSE:CB) to Sell

Chubb (NYSE:CB) was downgraded by Zacks Investment Research from a “buy” rating to a “sell” rating in a report released on Friday, January 5th.

According to Zacks, “Chubb stands a good chance of taking leadership in the P&C space, benefiting from compelling products and services. Its inorganic growth story is impressive, helping it achieve higher long-term ROE. Investment results are exhibiting improvement owing to improving rate environment. A strong capital position helps Chubb boost in shareholders’ value and invest in strategic initiatives to drive growth. Notably, it is on track to achieve annual run-rate integration-related savings of $875 million (up from $800 million guided earlier) by the end of 2018. However, exposure to cat loss and escalating expenses raise concerns for Chubb. The company estimates fourth quarter cat loss from wildfire in California to be about $249 million and another $34 million from all other natural catastrophe. Shares of Chubb have undeperformed the industry in a year's time.”

Other analysts also recently issued research reports about the stock. UBS Group decreased their price target on shares of Chubb from $161.00 to $160.00 and set a “buy” rating for the company in a research note on Tuesday, September 19th. ValuEngine downgraded shares of Chubb from a “buy” rating to a “hold” rating in a research note on Tuesday, October 10th. Keefe, Bruyette & Woods reissued a “buy” rating and issued a $153.00 price objective on shares of Chubb in a research note on Thursday, September 28th. JPMorgan Chase & Co. raised shares of Chubb from a “neutral” rating to an “overweight” rating in a research note on Wednesday, November 8th. Finally, Citigroup boosted their price objective on shares of Chubb from $167.00 to $173.00 and gave the stock a “neutral” rating in a research note on Monday, October 30th. One analyst has rated the stock with a sell rating, four have assigned a hold rating and ten have given a buy rating to the company’s stock. The company has an average rating of “Buy” and an average target price of $161.33.

Chubb (NYSE CB) traded up $1.14 on Friday, reaching $145.64. The company had a trading volume of 1,360,000 shares, compared to its average volume of 1,600,000. The company has a current ratio of 0.30, a quick ratio of 0.30 and a debt-to-equity ratio of 0.23. The stock has a market capitalization of $67,610.00, a price-to-earnings ratio of 17.46, a P/E/G ratio of 1.36 and a beta of 0.96. Chubb has a 12 month low of $127.15 and a 12 month high of $156.00.

Chubb (NYSE:CB) last announced its quarterly earnings data on Thursday, October 26th. The financial services provider reported ($0.13) earnings per share (EPS) for the quarter, topping the Thomson Reuters’ consensus estimate of ($0.24) by $0.11. The business had revenue of $7.36 billion during the quarter, compared to the consensus estimate of $7.14 billion. Chubb had a net margin of 12.15% and a return on equity of 7.22%. The firm’s quarterly revenue was up 4.6% compared to the same quarter last year. During the same quarter last year, the firm earned $2.88 earnings per share. analysts predict that Chubb will post 7.22 earnings per share for the current year.

Chubb announced that its Board of Directors has authorized a share repurchase plan on Thursday, December 21st that authorizes the company to buyback $1.00 billion in outstanding shares. This buyback authorization authorizes the financial services provider to purchase shares of its stock through open market purchases. Shares buyback plans are usually a sign that the company’s board of directors believes its shares are undervalued.

In related news, insider Paul Bennett Medini sold 5,180 shares of the business’s stock in a transaction on Thursday, November 9th. The shares were sold at an average price of $150.48, for a total transaction of $779,486.40. Following the completion of the transaction, the insider now directly owns 91,775 shares in the company, valued at $13,810,302. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Evan G. Greenberg sold 95,761 shares of the business’s stock in a transaction on Thursday, December 21st. The shares were sold at an average price of $145.56, for a total transaction of $13,938,971.16. Following the transaction, the chief executive officer now owns 1,367,229 shares of the company’s stock, valued at $199,013,853.24. The disclosure for this sale can be found here. Insiders have sold 164,956 shares of company stock worth $24,417,316 over the last three months. Corporate insiders own 0.43% of the company’s stock.

Several institutional investors have recently modified their holdings of the business. Vanguard Group Inc. raised its position in shares of Chubb by 2.4% in the second quarter. Vanguard Group Inc. now owns 35,320,686 shares of the financial services provider’s stock worth $5,134,923,000 after acquiring an additional 838,652 shares during the period. BlackRock Inc. raised its position in shares of Chubb by 1.4% during the 2nd quarter. BlackRock Inc. now owns 29,312,701 shares of the financial services provider’s stock worth $4,261,481,000 after purchasing an additional 409,574 shares during the last quarter. WCM Investment Management CA raised its position in shares of Chubb by 105.1% during the 3rd quarter. WCM Investment Management CA now owns 11,137,460 shares of the financial services provider’s stock worth $1,587,644,000 after purchasing an additional 5,707,734 shares during the last quarter. American Century Companies Inc. raised its position in shares of Chubb by 6.0% during the 3rd quarter. American Century Companies Inc. now owns 3,963,751 shares of the financial services provider’s stock worth $565,033,000 after purchasing an additional 225,475 shares during the last quarter. Finally, Legal & General Group Plc raised its position in shares of Chubb by 3.5% during the 3rd quarter. Legal & General Group Plc now owns 2,502,609 shares of the financial services provider’s stock worth $356,732,000 after purchasing an additional 84,700 shares during the last quarter. Institutional investors and hedge funds own 88.17% of the company’s stock.

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About Chubb

Chubb Limited is a holding company. The Company, through its subsidiaries, provides a range of insurance and reinsurance products and services to clients around the world. Its segments include North America Commercial property and casualty (P&C) Insurance, North America Personal P&C Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance and Life Insurance.

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