Zacks Investment Research Downgrades Chubb (CB) to Sell

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

According to Zacks, “Shares of Chubb have underperformed the industry year to date. The company has witnessed downward estimate revisions in the last seven days. Also an unfavorable Zacks Rank and Earnings ESP of -1.36% make surprise prediction difficult as it reports first quarter results on Apr 24. Exposure to cat loss induces volatility in underwriting profitability. Chubb estimates cat loss of $305 million form California mudslides and northeast winter storms. Escalating expenses raise weigh on margin expansion. Nonetheless, 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. A strong capital position helps Chubb boost shareholders’ value and invests in strategic initiatives to drive growth. Notably, it is on track to achieve annual run-rate integration-related savings of $875 million by the end of 2018.”

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CB has been the subject of a number of other research reports. Barclays boosted their price objective on shares of Chubb from $169.00 to $175.00 and gave the stock an “overweight” rating in a research note on Tuesday, February 20th. Wells Fargo reissued a “buy” rating and issued a $169.00 price objective on shares of Chubb in a research note on Monday, April 2nd. Credit Suisse Group reissued a “neutral” rating and issued a $156.00 price objective on shares of Chubb in a research note on Tuesday, December 19th. Royal Bank of Canada reissued a “buy” rating and issued a $170.00 price objective on shares of Chubb in a research note on Wednesday, January 31st. Finally, Argus started coverage on shares of Chubb in a research note on Friday. They issued a “hold” rating for the company. One research analyst has rated the stock with a sell rating, six have issued a hold rating and ten have given a buy rating to the stock. The company presently has a consensus rating of “Buy” and a consensus price target of $162.92.

Chubb stock opened at $134.13 on Friday. The company has a quick ratio of 0.30, a current ratio of 0.30 and a debt-to-equity ratio of 0.23. Chubb has a fifty-two week low of $131.14 and a fifty-two week high of $157.50. The company has a market cap of $62,248.53, a PE ratio of 16.72, a P/E/G ratio of 1.31 and a beta of 1.01.

Chubb (NYSE:CB) last posted its quarterly earnings results on Tuesday, January 30th. The financial services provider reported $3.17 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $2.31 by $0.86. The firm had revenue of $7.05 billion during the quarter, compared to the consensus estimate of $6.64 billion. Chubb had a net margin of 11.87% and a return on equity of 7.52%. The company’s revenue was up 1.6% on a year-over-year basis. During the same quarter in the previous year, the firm posted $2.72 earnings per share. sell-side analysts predict that Chubb will post 10.26 EPS for the current year.

Chubb declared that its Board of Directors has initiated a share repurchase program on Thursday, December 21st that allows the company to buyback $1.00 billion in outstanding shares. This buyback authorization allows the financial services provider to repurchase shares of its stock through open market purchases. Shares buyback programs are typically an indication that the company’s management believes its stock is undervalued.

In other news, insider Philip V. Bancroft sold 55,675 shares of the company’s stock in a transaction on Thursday, March 15th. The stock was sold at an average price of $140.94, for a total transaction of $7,846,834.50. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. Also, insider Juan C. Andrade sold 9,373 shares of the company’s stock in a transaction on Wednesday, February 21st. The stock was sold at an average price of $146.06, for a total value of $1,369,020.38. Following the transaction, the insider now directly owns 110,195 shares in the company, valued at $16,095,081.70. The disclosure for this sale can be found here. Corporate insiders own 0.43% of the company’s stock.

Hedge funds have recently modified their holdings of the company. Financial Gravity Companies Inc. purchased a new stake in shares of Chubb during the fourth quarter valued at $103,000. Welch Group LLC purchased a new stake in shares of Chubb during the fourth quarter valued at $110,000. Focused Wealth Management Inc purchased a new stake in shares of Chubb during the fourth quarter valued at $117,000. Covenant Multifamily Offices LLC purchased a new stake in shares of Chubb during the fourth quarter valued at $135,000. Finally, Zions Bancorporation grew its holdings in shares of Chubb by 716.3% during the third quarter. Zions Bancorporation now owns 1,151 shares of the financial services provider’s stock valued at $164,000 after buying an additional 1,010 shares during the last quarter. 89.20% of the stock is currently owned by institutional investors and hedge funds.

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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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