Cincinnati Financial upgraded to Outperform from Market Perform at BMO Capital

BMO Capital upgraded Cincinnati Financial to Outperform from Market Perform with a price target of $135, up from $125. The analyst increased estimates approximately 4% through 2025 saying Cincinnati continues to add excess reserves while actual cash-paid loss ratios are improving. As long as social inflation doesn’t take another step higher in 2024, the bank’s loss ratio margin bar is low and its 2024 earnings estimates can exceed the consensus by about 5%, the analyst tells investors in a research note. The firm believes Cincinnati Financial’s “profit margin potholes” related to inflation over the past two years “are less likely to poke their heads again in 2024, relative to peers.”