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On Wednesday, Keefe, Bruyette & Woods analyst Meyer Shields adjusted the price target on CNA Financial Corporation (NYSE:CNA) stock, bringing it down to $53.00 from the previous figure of $54.00. Despite the reduction, Shields opted to maintain a Market Perform rating on the insurer’s shares.
The revision follows the company’s fourth-quarter results of 2024 and the insights gained from the subsequent conference call. Shields cited several reasons for the adjustment, including expectations of increased expense ratios and decreased net investment income, along with lower earnings from the Life & Group and Corporate segments. These factors were somewhat counterbalanced by an anticipated reduction in catastrophe losses.
Shields recalibrated the earnings per share (EPS) estimates for the years 2025 and 2026. The new forecasts stand at $5.30 and $5.75, respectively, a decrease from the former estimates of $5.55 and $6.00. This reassessment is rooted in a more conservative outlook on the company’s financial performance.
The analyst believes that the current market valuation of CNA Financial, which is trading at 8.5 times the projected 2026 EPS, is a fair reflection of the company’s near-term earnings growth potential. This valuation is contrasted with the median of its peers, which stands at 10.0 times earnings. Shields also pointed out that CNA Financial’s stock price adequately accounts for the ongoing challenges associated with its long-term care business, a factor that has been a persistent concern for the company.
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