A nice beat on EPS and we're down? Crazy markets. Just added a few more. GLTA
Shares of Intact Financial Corp. were lower in response to the release of fourth-quarter results after the bell on Tuesday that largely exceeded the Street’s expectations.
The Toronto-based property and casualty insurance company reported operating earnings per share of $3.34, driven by higher-than-anticipated underwriting income, net investment income and distribution/other income. The Street had expected $3.03.
“We think IFC delivered very good Q4/22 results,” said RBC Dominion Securities analyst Geoffrey Kwan in a research note. “Relative to consensus, while a lower tax rate drove a significant part (but not all) of the higher-than-consensus operating EPS: (1) the 91.5-per-cent combined ratio (inline with consensus) was a strong result, despite pressures in Personal Auto and U.K. Personal Lines; (2) net investment income was significantly higher than consensus and could see positive revisions; and (3) the tax benefit in Q4/22 was not necessarily a one-time item and could benefit future quarters. Relative to our forecast, Q4/22 operating EPS was well ahead of our forecast. While Auto’s headline combined ratio was good, the accident year loss ratio showed there remains work to be done and also in U.K. Personal. However, we think IFC’s track record suggests it can successfully rectify these issues (hence our note title). Big picture, while IFC’s shares may not perform as well in a market recovery scenario, we still view IFC as a core holding, reflecting positive company/industry fundamentals and strong track record of growth and profitability; potential catalyst(s); defensive attributes; and a reasonable valuation.”