BMO Capital analyst Michael Zaremski maintained a Buy rating on Cincinnati Financial (CINF – Research Report) today and set a price target of $165.00.
Michael Zaremski has given his Buy rating due to a combination of factors that highlight Cincinnati Financial’s potential for long-term shareholder value creation. Despite recent declines in the stock market impacting the company’s return on equity and book value, Zaremski points out that Cincinnati Financial’s shares are currently undervalued, trading at a relatively low price-to-earnings ratio. This undervaluation is particularly evident when considering the company’s significant exposure to equities, which has historically provided greater shareholder returns compared to investments in lower-yielding bonds.
Furthermore, Zaremski emphasizes Cincinnati Financial’s prudent reserving practices, which position the company favorably compared to its peers. These practices have allowed the company to maintain and potentially improve its profit margins, even as others in the industry face challenges. The recent market correction presents an opportunity for investors to acquire shares at an attractive valuation, reinforcing Zaremski’s confidence in the company’s long-term growth prospects.
Based on the recent corporate insider activity of 70 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of CINF in relation to earlier this year.