Chubb (NYSE:CB) Sees Unusually-High Trading Volume on Earnings Beat

Key Points

• Chubb beat earnings expectations in Q2, reporting EPS of $7.26 versus the $6.78 consensus estimate. Revenue rose 3.6% year over year to $14.71 billion, though it still came in below analyst expectations.
• Underwriting performance remained strong, with core operating income up 14.6% and a combined ratio of 83.8%. The company also posted solid property and casualty premium growth, which supports the bullish earnings reaction.
• Shares traded unusually heavily after the report, and several analysts raised price targets on the stock. JPMorgan lifted its target to $370, while other firms such as Goldman Sachs and Evercore also reiterated positive ratings.

Chubb Limited (NYSE:CB - Get Free Report) shares saw unusually-strong trading volume on Wednesday following a stronger than expected earnings report. 1,282,306 shares traded hands during mid-day trading, a decline of 25% from the previous session's volume of 1,717,698 shares.The stock last traded at $342.8860 and had previously closed at $354.80.

The financial services provider reported $7.26 earnings per share (EPS) for the quarter, topping the consensus estimate of $6.78 by $0.48. Chubb had a return on equity of 14.30% and a net margin of 18.58%.The firm had revenue of $14.71 billion during the quarter, compared to analyst estimates of $15.07 billion. During the same period in the prior year, the company posted $6.14 earnings per share. The business's revenue for the quarter was up 3.6% compared to the same quarter last year.

Chubb Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, July 2nd. Shareholders of record on Friday, June 12th were given a $1.02 dividend. This represents a $4.08 annualized dividend and a yield of 1.2%. The ex-dividend date was Friday, June 12th. This is a positive change from Chubb's previous quarterly dividend of $0.97. Chubb's dividend payout ratio is presently 14.41%.

Key Chubb News

Here are the key news stories impacting Chubb this week:

• Positive Sentiment: Chubb reported Q2 EPS of $7.26, topping estimates, with core operating income up 14.6% and per-share core operating income up 18.2%, showing stronger-than-expected underwriting performance. Article Title
• Positive Sentiment: Property and casualty underwriting remained solid, with a combined ratio of 83.8% and P&C net premiums written up 3.0% year over year, which investors tend to view as evidence of disciplined pricing and profitable growth. Article Title
• Positive Sentiment: JPMorgan raised its price target on Chubb to $370 from $340, reinforcing confidence in the stock’s valuation after the earnings report. Article Title
• Neutral Sentiment: Revenue came in below Wall Street’s estimate despite year-over-year growth, suggesting mixed top-line execution even as profitability improved. Article Title
• Neutral Sentiment: Chubb also drew attention as a dividend stock and announced leadership changes at Tempest Re, but those items appear less likely to drive the stock today than the earnings beat. Article Title
• Negative Sentiment: Some commentary noted that Chubb’s revenue missed expectations, which may limit upside if investors focus more on premium growth and future margin trends than on the earnings beat alone. Article Title

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on the stock. Keefe, Bruyette & Woods increased their price objective on shares of Chubb from $374.00 to $389.00 and gave the stock an "outperform" rating in a report on Wednesday, July 8th. Wolfe Research upped their target price on shares of Chubb from $372.00 to $373.00 and gave the stock an "outperform" rating in a research report on Monday, April 6th. Citigroup restated a "market outperform" rating on shares of Chubb in a research report on Wednesday. Evercore reissued an "outperform" rating and set a $374.00 price target on shares of Chubb in a research note on Friday, July 10th. Finally, The Goldman Sachs Group raised their target price on Chubb from $362.00 to $386.00 and gave the stock a "buy" rating in a report on Wednesday, July 1st. Two equities research analysts have rated the stock with a Strong Buy rating, seven have issued a Buy rating, twelve have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus price target of $359.09.

Insiders Place Their Bets

In other Chubb news, COO John W. Keogh sold 23,000 shares of Chubb stock in a transaction on Wednesday, May 27th. The shares were sold at an average price of $321.51, for a total value of $7,394,730.00. Following the sale, the chief operating officer directly owned 203,322 shares in the company, valued at approximately $65,370,056.22. The trade was a 10.16% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Company insiders own 0.37% of the company's stock.

Institutional Investors Weigh In On Chubb

A number of institutional investors and hedge funds have recently made changes to their positions in CB. Berkshire Hathaway Inc raised its position in Chubb by 9.3% during the fourth quarter. Berkshire Hathaway Inc now owns 34,249,183 shares of the financial services provider's stock worth $10,689,855,000 after acquiring an additional 2,916,288 shares in the last quarter. State Street Corp boosted its position in shares of Chubb by 0.4% in the third quarter. State Street Corp now owns 17,045,793 shares of the financial services provider's stock valued at $4,827,852,000 after acquiring an additional 68,553 shares during the period. Price T Rowe Associates Inc. MD boosted its holdings in Chubb by 25.6% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 14,947,799 shares of the financial services provider's stock valued at $4,665,508,000 after purchasing an additional 3,049,987 shares during the period. GQG Partners LLC boosted its stake in shares of Chubb by 15.2% in the fourth quarter. GQG Partners LLC now owns 12,481,176 shares of the financial services provider's stock valued at $3,895,627,000 after buying an additional 1,647,729 shares during the period. Finally, Bank of America Corp DE grew its holdings in shares of Chubb by 11.6% during the 2nd quarter. Bank of America Corp DE now owns 4,929,858 shares of the financial services provider's stock worth $1,428,278,000 after purchasing an additional 513,852 shares in the last quarter. Institutional investors own 83.81% of the company's stock.

Chubb Price Performance

The company has a quick ratio of 0.28, a current ratio of 0.28 and a debt-to-equity ratio of 0.20. The stock has a market capitalization of $133.07 billion, a price-to-earnings ratio of 12.10, a P/E/G ratio of 1.83 and a beta of 0.40. The business's 50 day simple moving average is $333.63 and its 200-day simple moving average is $326.34.

About Chubb

Chubb is a global property and casualty insurance company that underwrites a broad range of commercial and personal insurance products and related services. Its offerings include commercial property and casualty coverage, specialty liability, professional and management liability, cyber and technology insurance, marine and energy, surety, accident and health solutions, and high-net-worth personal lines such as homeowners, auto and valuables protection. Chubb serves businesses, individuals and institutions with tailored underwriting and risk-transfer solutions across multiple industry sectors.

In addition to core underwriting, Chubb provides risk engineering, loss control, claims management and risk consulting services intended to reduce loss severity and help clients manage exposures.

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