Cincinnati Financial (CINF) AI Stock Analysis

• Market Cap: $21.08B
• Dividend Yield: 2.45%
• Average Volume (3M): 943.01K
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.50
• Revenue Growth: 13.22%
• EPS Growth: 24.83%
• Country: US
• Employees: 5,624
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Property & Casualty
• EPS (TTM): 14.52
• Shares Outstanding: 156,564,730
• 10 Day Avg. Volume: 813,041
• 30 Day Avg. Volume: 943,014
• PEG Ratio: 0.37
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.02
• Price to Cash Flow (P/CF): 8.90
• P/FCF Ratio: 8.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $153.00
• Price Target Upside: 16.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Cincinnati Financial demonstrates strong financial performance and stability, supported by strategic initiatives and a favorable valuation. While challenges such as the California wildfires impact earnings, the company's robust growth, strategic management, and attractive valuation position it well for future performance. Overall, the stock presents a compelling investment opportunity with manageable risks.

Positive Factors

Revenue Growth

High-single-digit long-term revenue growth runway profile is expected for CINF.

Underwriting Performance

Strong core underwriting results in 4Q24 contributed to a better-than-expected performance.

Valuation

The Buy recommendation on shares of CINF remains predicated on appreciable upside potential from the current valuation.

Negative Factors

Earnings Impact

CINF's 2025 earnings per share estimate falls 29% following California wildfire exposure loss of $450-525M.

Reinsurance Costs

Additional reinsurance purchases are assumed to create a 5% headwind to operating income in 2025.

Wildfire Losses

Material losses related to the CA wildfires are anticipated.

Cincinnati Financial Business Overview & Revenue Model

Company Description

Cincinnati Financial Corporation, together with its subsidiaries, provides property casualty insurance products in the United States. The company operates through five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment offers coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also provides director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; and machinery and equipment coverage. The Personal Lines Insurance segment offers personal auto insurance; homeowner insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to various causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life; and whole life insurance products. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services; and insurance brokerage services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

How the Company Makes Money

Cincinnati Financial makes money primarily through the underwriting of insurance policies and investment income. Its revenue streams are largely derived from the premiums collected on various insurance products, including personal lines like homeowners and auto insurance, as well as commercial lines such as property, liability, and workers' compensation insurance. Another significant source of income for the company is investment income, earned from managing the premiums collected until claims are paid out. This includes investments in stocks, bonds, and other financial instruments. Additionally, Cincinnati Financial benefits from agency relationships, leveraging a network of independent agents to distribute its products and expand its market reach. The company's financial performance is also influenced by its disciplined underwriting practices and prudent risk management, ensuring profitability and long-term growth.

Cincinnati Financial Financial Statement Overview

Summary

Cincinnati Financial presents a robust financial position with strong revenue growth and profitability, supported by an efficient use of leverage. The increase in free cash flow highlights effective cash utilization, though the negative investing cash flow suggests continued investment activities. Overall, the company is on a positive trajectory with manageable risks.

Income Statement

Cincinnati Financial has demonstrated strong revenue growth with a 13.2% increase from 2023 to 2024. The net profit margin improved significantly from 18.4% in 2023 to 20.2% in 2024, indicating enhanced profitability. The absence of EBIT and EBITDA in 2024 might raise concerns about operational performance measurement, but the strong net income compensates for this gap.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.06 in 2024, showing strong leverage management. Stockholders' equity has increased, supporting a solid equity ratio of 38.2%. However, the decrease in total cash and short-term investments could indicate potential liquidity risks.

Cash Flow

Free cash flow increased by 30.2% from 2023 to 2024, emphasizing efficient cash management. The operating cash flow to net income ratio of 1.16 indicates strong cash generation relative to net income. Although free cash flow is robust, the investing cash flow remains negative, signaling ongoing investments or capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.34B	10.01B	6.56B	9.63B	7.54B
	Gross Profit
11.34B	10.01B	6.56B	9.63B	7.54B
	EBIT
0.00	2.33B	-641.00M	3.75B	1.55B
	EBITDA
0.00	2.44B	-514.00M	3.84B	1.63B
	Net Income Common Stockholders
2.29B	1.84B	-486.00M	2.97B	1.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
983.00M	907.00M	1.26B	1.14B	900.00M
	Total Assets
36.50B	32.77B	29.74B	31.39B	27.54B
	Total Debt
875.00M	874.00M	891.00M	897.00M	899.00M
	Net Debt
-108.00M	-33.00M	-373.00M	-242.00M	-1.00M
	Total Liabilities
22.57B	20.67B	19.20B	18.28B	16.75B
	Stockholders Equity
13.94B	12.10B	10.53B	13.11B	10.79B
Cash Flow		Free Cash Flow
2.65B	2.03B	2.04B	1.97B	1.47B
	Operating Cash Flow
2.65B	2.05B	2.05B	1.98B	1.49B
	Investing Cash Flow
-1.70B	-1.61B	-933.00M	-1.06B	-560.00M
	Financing Cash Flow
-877.00M	-801.00M	-994.00M	-685.00M	-798.00M

Cincinnati Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 131.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CINF, the sentiment is Negative. The current price of 131.6 is below the 20-day moving average (MA) of 142.14, below the 50-day MA of 139.80, and below the 200-day MA of 136.66, indicating a bearish trend. The MACD of 1.97 indicates Negative momentum. The RSI at 60.26 is Neutral, neither overbought nor oversold. The STOCH value of 61.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CINF.

Cincinnati Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CINF	82 Outperform	$21.08B	9.27	17.61%	2.45%	13.22%	24.83%
CNA	78 Outperform	$12.98B	13.66	9.40%	3.90%	7.30%	-20.49%
MKL	77 Outperform	$22.76B	9.00	16.52%	―	5.17%	35.36%
WRB	76 Outperform	$25.38B	15.37	22.16%	0.48%	12.32%	29.21%
AFG	75 Outperform	$10.48B	11.85	20.33%	2.41%	6.91%	4.97%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%
L	60 Neutral	$18.16B	13.46	8.63%	0.29%	10.44%	1.63%

Cincinnati Financial Corporate Events

Cincinnati Financial Highlights Strategic Initiatives at Investor Day

On March 10, 2025, Cincinnati Financial Corporation released presentation slides for its Investor Day event, highlighting its strategic initiatives and financial performance. The presentation emphasized the company’s consistent dividend growth, improved diversification, and strong capital management, which supports future premium growth. The slides also detailed the company’s successful risk management practices and its focus on enhancing investment income and book value growth. These efforts are aimed at strengthening Cincinnati Financial’s market position and providing value to stakeholders.

Cincinnati Financial Reports Mixed 2024 Financial Results

Cincinnati Financial Corporation reported its fourth-quarter and full-year 2024 financial results on February 10, 2025. For the fourth quarter of 2024, the company saw a significant decline in net income to $405 million from $1.183 billion in the same period the previous year, mainly due to a decrease in after-tax net investment gains. However, the full-year 2024 net income increased by 24% to $2.292 billion, supported by a 26% rise in non-GAAP operating income and improvements in underwriting profit and investment income. The company also reported growth in its book value per share and maintained a strong property casualty combined ratio.

Cincinnati Financial Raises Dividend Amidst Challenges

On January 31, 2025, Cincinnati Financial Corporation announced an increase in its regular quarterly cash dividend to 87 cents per share, a 7% rise from the previous dividend. This decision reflects the board’s confidence in the company’s financial strength, despite the material impact of recent California wildfires on first-quarter earnings. The company remains committed to meeting insurance obligations and maintaining long-term shareholder value.