Can Solid CNA Financial Results Drive Loews (L) Q1 Earnings?

Loews Corporation (NYSE:L) is slated to report first-quarter 2018 results on Apr 30 before the market opens. In the fourth quarter of 2017, the company delivered a positive earnings surprise of 15.3%.

Let’s see, how things are shaping up for this announcement.

A consistently better performance at CNA Financial (NYSE:CNA) , a Lowes subsidiary, is likely to have aided Loews to deliver an improved quarterly result. CNA Financial intensified its focus on core competencies in commercial property casualty insurance by shedding reinsurance, personal automobile insurance, life insurance, and group health products as well as reinsuring asbestos and pollution liabilities to lower balance sheet risk.

CNA Financial continues to efficiently manage its long-term care book of business through efficient product claim management, thereby mitigating risks as well as effecting rate increase.

Nonetheless, an exposure to cat loss might have been a drag on CNA Financial’s underwriting profitability.

Loews Hotels is likely to have continued to deliver a strong performance, banking on solid operations at its hotel properties.

Boardwalk Pipeline (NYSE:BWP) is expected to have delivered better numbers on the strength of its growth projects.

However, lower day rate and lower rigs working are expected to have weighed on Diamond Offshore (NYSE:DO) segment. However, higher contract drilling revenues and cost containment should have limited this downside.

The Zacks Consensus Estimate for earnings is pegged at 78 cents, down 1.3% year over year.

A lower tax incidence owing to a drop in the tax rate might provide an additional boost to the bottom line. Also, continued share buybacks should have improved the bottom line.

What Our Quantitative Model States

Our proven model does not conclusively show that Loews is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Zacks ESP: Loews has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Loews Corporation Price and EPS Surprise

Zacks Rank: Loews holds a Zacks Rank #3, which increases the predictive power of ESP. However, a company’s 0.00% Earnings ESP makes surprise prediction difficult.

We caution against all Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>