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 research report issued on Wednesday.

According to Zacks, “Chubb’s third-quarter earnings per share beat estimates and recovered from the year-ago loss on lower underwriting. Premiums too increased. Chubb benefits from a suite of compelling products as well as services. Its inorganic growth story is impressive, helping it achieve a higher long-term ROE. Increased scales, efficiencies and a solid balance sheet will lend Chubb a competitive edge. It estimates solid growth in Overseas General operations, which include both commercial and consumer lines. A strong capital position aids Chubb to boost shareholder value and invest in strategic initiatives for driving growth. It is on track to achieve annual run-rate integration-related savings of $875 million by 2018 end. However, exposure to cat loss remains a concern as it induces volatility in underwriting profitability. Also, mounting expenses weigh on margin expansion. Shares of Chubb have underperformed the industry year to date.”

Several other brokerages have also recently issued reports on CB. Wells Fargo & Co reiterated a “buy” rating on shares of Chubb in a research report on Wednesday, August 8th. ValuEngine upgraded shares of Chubb from a “sell” rating to a “hold” rating in a report on Thursday, August 2nd. Credit Suisse Group assumed coverage on shares of Chubb in a report on Tuesday, August 7th. They issued a “neutral” rating and a $150.00 price objective on the stock. Citigroup upped their price objective on shares of Chubb from $151.00 to $157.00 and gave the stock a “buy” rating in a report on Monday, July 30th. Finally, Deutsche Bank cut shares of Chubb from a “hold” rating to a “sell” rating and cut their price objective for the stock from $135.00 to $126.00 in a report on Monday, August 13th. Two equities research analysts have rated the stock with a sell rating, five have given a hold rating and eight have issued a buy rating to the company. The stock presently has an average rating of “Hold” and a consensus price target of $159.00.



Shares of NYSE CB traded up $0.28 during midday trading on Wednesday, hitting $123.96. 78,256 shares of the company traded hands, compared to its average volume of 1,696,687. Chubb has a 12-month low of $120.50 and a 12-month high of $157.50. The company has a debt-to-equity ratio of 0.24, a current ratio of 0.31 and a quick ratio of 0.31. The stock has a market capitalization of $58.62 billion, a P/E ratio of 15.33, a P/E/G ratio of 1.26 and a beta of 1.01.

Chubb (NYSE:CB) last announced its quarterly earnings results on Tuesday, October 23rd. The financial services provider reported $2.41 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.39 by $0.02. Chubb had a net margin of 11.53% and a return on equity of 7.41%. The company had revenue of $7.55 billion for the quarter, compared to analysts’ expectations of $7.63 billion. During the same quarter in the previous year, the company earned ($0.13) earnings per share. Chubb’s quarterly revenue was up 2.5% on a year-over-year basis. Research analysts anticipate that Chubb will post 10.08 earnings per share for the current year.

In other news, CEO Evan G. Greenberg sold 227,994 shares of the company’s stock in a transaction that occurred on Wednesday, September 19th. The shares were sold at an average price of $140.29, for a total value of $31,985,278.26. Following the transaction, the chief executive officer now owns 1,583,326 shares in the company, valued at $222,124,804.54. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Timothy Alan Boroughs sold 14,971 shares of the company’s stock in a transaction that occurred on Thursday, September 20th. The stock was sold at an average price of $139.37, for a total transaction of $2,086,508.27. Following the completion of the transaction, the insider now owns 202,794 shares in the company, valued at approximately $28,263,399.78. The disclosure for this sale can be found here. In the last 90 days, insiders sold 243,093 shares of company stock worth $34,089,733. Corporate insiders own 0.44% of the company’s stock.

Several hedge funds and other institutional investors have recently modified their holdings of the company. Liberty Capital Management Inc. lifted its stake in shares of Chubb by 17.8% in the third quarter. Liberty Capital Management Inc. now owns 25,010 shares of the financial services provider’s stock worth $3,342,000 after buying an additional 3,777 shares in the last quarter. Oakworth Capital Inc. lifted its stake in shares of Chubb by 36.0% in the third quarter. Oakworth Capital Inc. now owns 2,240 shares of the financial services provider’s stock worth $299,000 after buying an additional 593 shares in the last quarter. Middleton & Co Inc MA lifted its stake in shares of Chubb by 6.1% in the third quarter. Middleton & Co Inc MA now owns 57,427 shares of the financial services provider’s stock worth $7,675,000 after buying an additional 3,315 shares in the last quarter. Palo Capital Inc. bought a new position in shares of Chubb in the third quarter worth approximately $249,000. Finally, Mycio Wealth Partners LLC lifted its stake in shares of Chubb by 1.0% in the third quarter. Mycio Wealth Partners LLC now owns 1,049,936 shares of the financial services provider’s stock worth $140,313,000 after buying an additional 10,806 shares in the last quarter. Hedge funds and other institutional investors own 85.99% of the company’s stock.

Chubb Company Profile

Chubb Limited, through its subsidiaries, provides insurance and reinsurance products worldwide. Its North America Commercial P&C Insurance segment offers commercial property, marine, general casualty, workers' compensation, package policies, and risk management; and professional lines, marine, construction, environmental, medical, cyber risk, and excess casualty, as well as group accident and health insurance to large, middle market, and small commercial businesses in the United States, Canada, and Bermuda.

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