The Hartford Financial Services Group, Inc. HIG is slated to release fourth-quarter 2024 results on Jan. 30, after the closing bell. The Zacks Consensus Estimate for HIG’s fourth-quarter earnings per share (EPS) is pegged at $2.67, which indicates a deterioration of 12.8% from the year-ago quarter’s reported figure.

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The fourth-quarter EPS estimate has moved south by 3 cents over the past month. The consensus mark for revenues is $4.8 billion, indicating 10.6% growth from the prior-year quarter’s actual.

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For 2025, the Zacks Consensus Estimate for HIG’s revenues is pegged at $18.2 billion, implying a rise of 10.4% year over year. Also, the consensus mark for current-year EPS is pegged at $10.06, implying a jump of around 13.3% on a year-over-year basis.

Hartford Financial’s bottom line beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 9.1%. This is depicted in the chart below:

Q4 Earnings Whispers for HIG

Our proven model does not conclusively predict an earnings beat for Hartford Financial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: Hartford Financial has an Earnings ESP of -3.21%. This is because the Most Accurate Estimate currently is $2.58 per share, lower than the Zacks Consensus Estimate of $2.67. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Zacks Rank: HIG currently has a Zacks Rank of 3.

Now, let us see how things have shaped up before the fourth-quarter earnings announcement.

Factors to Note

Hartford Financial's top line is expected to have witnessed growth in the fourth quarter, driven by higher premiums across its Commercial Lines, Personal Lines, and Group Benefits businesses. The Zacks Consensus Estimate for total net premiums earned is pegged at $5.9 billion, reflecting a 7.7% increase compared to the same quarter last year.

For the Personal Lines business, rising premiums are expected to boost results. The homeowners’ insurance segment is likely to have benefited from new product offerings. The Zacks Consensus Estimate for Personal Lines earned premiums is pegged at $889.1 million, representing a 10.6% increase year over year. The Zacks Consensus Estimate for Income before taxes for this business is $65 million, implying a year-over-year increase of 54.8%. Earned pricing increases and outpacing loss cost trends are expected to have benefited this business.

In the Commercial Lines segment, consistent rate hikes, new business expansion, strong retention, and solid submission volumes are likely to have contributed to growth, although this may have been partially offset by catastrophe losses affecting underwriting results. The consensus estimate for earned premiums in this segment is $3.3 billion, suggesting a 9.7% rise from the prior-year quarter.

The Group Benefits segment is likely to have been supported by growth in fully insured ongoing premiums, improved mortality trends, and strong long-term disability claim recoveries. The consensus estimate for the segment’s revenues is pegged at $1.8 billion, reflecting a nearly 1% increase from the prior-year period.

Additionally, Hartford Financial’s fourth-quarter investment performance may have benefited from higher returns in its private equity and real estate portfolio. These might have helped the company’s fourth-quarter results.

However, the bottom line is expected to have been pressured by rising benefits, losses and loss adjustment expenses, as well as higher insurance operating costs. HIG’s margins are also likely to have been impacted by ongoing investments in digital, analytics and data science capabilities. Commercial Line, Personal Line and Group Benefits business’s expense ratio is expected to have deteriorated by 470, 223 and 59 basis points, respectively, in the fourth quarter.

Stocks That Warrant a Look

While an earnings beat looks uncertain for Hartford Financial, here are some other companies worth considering from the broader finance space, as our model shows that these have the right combination of elements to post an earnings beat this time around:

Kinsale Capital Group, Inc. KNSL has an Earnings ESP of +1.06% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kinsale Capital’s bottom line for the to-be-reported quarter is pegged at $4.34 per share, implying year-over-year growth of 12.1%. KNSL beat earnings estimates in each of the past four quarters, with an average surprise of 9.4%.

Rithm Capital Corp. RITM has an Earnings ESP of +2.22% and is a Zacks #2 Ranked player. The Zacks Consensus Estimate for Rithm Capital’s bottom line for the to-be-reported quarter is pegged at 45 cents per share, which remained stable over the past month. The consensus estimate for RITM’s revenues is pegged at $1.23 billion, indicating 73.2% growth from a year ago.

Bread Financial Holdings, Inc. BFH has an Earnings ESP of +25.94% and a Zacks Rank of 2.

The Zacks Consensus Estimate for Bread Financial’s bottom line for the to-be-reported quarter is pegged at 34 cents per share, which increased 4 cents in the past month. BFH beat earnings estimates in two of the past four quarters and missed twice, with an average surprise of 70.2%.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report

Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report

Bread Financial Holdings, Inc. (BFH) : Free Stock Analysis Report

Rithm Capital Corp. (RITM) : Free Stock Analysis Report

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