Core Viewpoint - Travelers (TRV) reported quarterly earnings of $9.15 per share, significantly exceeding the Zacks Consensus Estimate of $6.57 per share, and showing an increase from $7.01 per share a year ago, indicating strong performance in the insurance sector [1][2] Financial Performance - The company achieved revenues of $12.06 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.01% and up from $10.94 billion year-over-year [2] - Over the last four quarters, Travelers has exceeded consensus EPS estimates three times and has also topped revenue estimates three times [2] Stock Performance and Outlook - Travelers shares have declined approximately 0.7% since the beginning of the year, contrasting with the S&P 500's gain of 2.9% [3] - The company's earnings outlook is mixed, with current consensus EPS estimates at $5.81 for the coming quarter and $20.36 for the current fiscal year, with revenues expected to be $12.14 billion and $49.73 billion respectively [7] Industry Context - The Insurance - Property and Casualty industry, to which Travelers belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Travelers' stock performance [5][6]

FOURTH QUARTER 2024 OVERVIEW Travelers Reports Exceptional Fourth Quarter and Full Year Results FOURTH QUARTER 2024 RESULTS January 22, 2025 LONG-TERM FINANCIAL STRATEGY Meaningful and sustainable competitive advantages Generation of top-tier earnings and capital substantially in excess of growth needs Balanced approach to rightsizing capital and growing book value per share over time CREATE SHAREHOLDER VALUE Objective: Mid–Teens Core ROE Over Time 2 • Excellent fourth quarter net income of $2.082 billion a ...

Financial Performance - Net income for Q4 2024 reached $2,991 million, a significant increase from $1,626 million in Q4 2023, representing an 83.8% year-over-year growth[3] - Core income for Q4 2024 was $2,126 million, up from $1,633 million in Q4 2023, reflecting a 30.2% increase[3] - The diluted earnings per share for Q4 2024 was $12.79, compared to $6.99 in Q4 2023, marking an 83.5% increase[3] - Net income for Q4 2024 reached $4,999 million, a significant increase from $2,991 million in Q4 2023, representing a growth of approximately 67.1%[4] - Core income for YTD Q4 2024 was $5,025 million, up from $3,072 million in YTD Q4 2023, marking a growth of around 63.7%[4] - Basic earnings per share for Q4 2024 were $21.76, a rise from $12.93 in Q4 2023, representing an increase of approximately 68.3%[4] Revenue and Premiums - Total revenues for YTD Q4 2024 were $46,423 million, up from $41,364 million in YTD Q4 2023, indicating a year-over-year increase of about 12.4%[7] - Premiums collected in Q4 2024 amounted to $10,868 million, compared to $9,973 million in Q4 2023, reflecting an increase of approximately 9.0%[7] - Total revenues for Q4 2023 were $10,700 million, compared to $10,133 million in Q2 2023[12] - Gross written premiums increased to $11,310 million in 1Q2024, up from $10,455 million in 4Q2023, representing a growth of 8.2%[15] - Net written premiums for 1Q2024 were $10,184 million, compared to $9,994 million in 4Q2023, reflecting a 1.9% increase[15] Assets and Equity - Total assets at the end of Q4 2024 were $134,588 million, up from $125,978 million at the end of Q4 2023, indicating a 6.5% growth[3] - Total equity at the end of Q4 2024 was $27,864 million, an increase from $24,921 million in Q4 2023, representing a 12.0% rise[3] - The adjusted book value per share at the end of Q4 2024 was $139.04, compared to $122.90 at the end of Q4 2023, indicating a 13.1% increase[3] Investment Income - Net investment income for YTD Q4 2024 was $3,590 million, compared to $2,922 million in YTD Q4 2023, showing an increase of about 23.0%[7] - The company reported net realized investment gains of $26 million for YTD Q4 2024, a recovery from net losses of $105 million in YTD Q4 2023[4] - Gross investment income for Q4 2024 is projected to be $964 million, an increase from $787 million in Q4 2023, representing a growth of approximately 22.5%[72] - Net investment income, after-tax, is expected to reach $785 million in Q4 2024, compared to $645 million in Q4 2023, indicating a year-over-year increase of about 21.7%[72] Claims and Expenses - Claims and expenses for Q4 2024 totaled $9,414 million, a decrease from $10,344 million in Q4 2023, indicating a reduction of approximately 9.0%[7] - Incurred losses for Business Insurance totaled $12,500 million for YTD Q4 2023, increasing to $13,465 million for YTD Q4 2024, representing an increase of approximately 7.7%[81] - Losses and loss adjustment expenses increased from $12,500 million in YTD 4Q2023 to $13,465 million in YTD 4Q2024, a rise of 7.7%[27] Shareholder Returns - The company declared dividends of $242 million in Q4 2024, up from $232 million in Q4 2023, reflecting a 4.3% increase[3] - The company repurchased 1.0 million shares at a cost of $250 million in Q4 2024, compared to 1.1 million shares for $250 million in Q4 2023[3] Tax and Effective Rates - The effective tax rate on net investment income for Q4 2024 was reported at 17.8%, compared to 16.6% in Q4 2023[7] - The effective tax rate on net investment income was 17.9% for Q4 2023, consistent with the previous quarter[12] Underwriting Performance - The combined ratio for Q4 2023 was 85.8%, improving from 101.0% in Q3 2023, indicating better underwriting performance[9] - The underlying combined ratio improved to 85.9% in Q4 2023 from 90.6% in Q3 2023[9] - The combined ratio improved from 94.7% in YTD 4Q2023 to 92.5% in YTD 4Q2024, indicating better underwriting performance[24] Debt and Capital Structure - The total debt of the company as of December 31, 2024, was $8,033 million, compared to $8,031 million at the end of 2023, indicating a marginal increase[87] - The total debt to capital ratio, excluding net unrealized investment gains (losses), decreased from 22.3% in 2023 to 20.3% in 2024, indicating improved capital structure[87] Reinsurance and Recoverables - Gross reinsurance recoverables totaled $8.119 billion as of December 31, 2024, a decrease from $8.261 billion in 2023[75] - The net reinsurance recoverables were $8 billion in 2024, compared to $8.143 billion in 2023[75]

Core Viewpoint - Travelers Companies, Inc. is expected to report fourth-quarter 2024 earnings on January 22, with a history of earnings beats in three of the last four quarters, indicating a positive outlook for the upcoming report [1] Factors to Consider - Improved performance across all three segments is anticipated to enhance Travelers' fourth-quarter results, with premiums expected to reach $10.8 billion, reflecting an 8.3% increase year-over-year [2] - A higher average level of invested assets and strong returns from both fixed-income and non-fixed-income portfolios are likely to boost investment results, with net investment income estimated at $884.5 million, a 13% increase from the previous year [3] Segment Performance - The Personal Insurance segment is projected to benefit from strong renewal pricing, with earned premiums estimated at $4.2 billion, a 4.7% improvement year-over-year [4] - The Bond & Specialty Insurance segment is expected to see earned premiums of $1 billion, indicating a 7.2% increase from the prior year [5] - Business Insurance is likely to report earned premiums of $5.6 billion, reflecting an 11.4% increase year-over-year [6] Revenue and Profitability - An increase in net written premiums and higher net investment income is expected to contribute to revenue growth, with total revenues estimated at $11.9 billion, a 9.1% increase from the previous year [7] - Improved underwriting profitability is anticipated, with a combined ratio estimated at 89, showing a 300 basis points improvement year-over-year, despite losses from Hurricane Milton [8] Expenses and Earnings - Total expenses are projected to rise by 14.4% to $10.2 billion due to higher claims and administrative costs [9] - The Zacks Consensus Estimate for earnings per share is $6.53, indicating a decrease of 6.9% from the year-ago figure [10] Earnings Prediction - The model predicts an earnings beat for Travelers, supported by a positive Earnings ESP of +8.12% and a Zacks Rank of 2 (Buy) [12][13]

Core Viewpoint - Travelers (TRV) is expected to report quarterly earnings of $6.50 per share, a decline of 7.3% year-over-year, with revenues projected at $11.94 billion, reflecting a 9.2% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 0.3% in the last 30 days, indicating a reassessment by analysts [2]. - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock [3]. Revenue Projections - Analysts estimate 'Total Revenues- Net investment income' at $925.53 million, a year-over-year increase of 19% [5]. - 'Total Revenues- Fee income' is projected to be $113.25 million, reflecting a 3.9% increase year-over-year [5]. - 'Total Revenues- Premiums' is expected to reach $10.80 billion, indicating an 8.3% year-over-year change [6]. - 'Total Revenues- Other Revenues' is forecasted at $98.14 million, representing a 25.8% increase from the prior year [6]. Expense Ratios - The 'Underwriting Expense Ratio - Consolidated' is projected to be 28.4%, up from 27.4% a year ago [6]. - The 'Loss and loss adjustment expense ratio - Consolidated' is expected to be 61.5%, compared to 58.4% last year [7]. - The consensus estimate for the 'Combined Ratio - Consolidated' stands at 90.2%, up from 85.8% year-over-year [7]. - 'Underwriting Expense Ratio - Business Insurance' is expected to reach 29.4%, compared to 28.8% in the same quarter last year [7]. - The 'Loss and loss adjustment expense ratio - Bond & Specialty Insurance' is projected at 44.6%, up from 41.1% a year ago [8]. - 'Underwriting Expense Ratio - Bond & Specialty Insurance' is expected to be 38.8%, compared to 36.2% last year [8]. - 'Combined Ratio - Personal Insurance' is estimated at 92.0%, compared to 86.8% in the same quarter last year [9]. - The average prediction for 'Loss and loss adjustment expense ratio - Personal Insurance' is 67.0%, up from 63.4% last year [9]. Stock Performance - Shares of Travelers have returned +1.7% over the past month, outperforming the Zacks S&P 500 composite, which declined by -3.3% [10].

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Travelers (TRV) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Travelers is expected to report quarterly earnings of $6.50 per share, reflecting a year-over-year decrease of 7.3%, while revenues are projected to be $12.02 billion, an increase of 9.9% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.33% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading, which is currently +11.28% for Travelers, indicates a strong likelihood of beating the consensus EPS estimate [10][11]. Historical Performance - In the last reported quarter, Travelers exceeded the expected earnings of $3.79 per share by delivering $5.24, resulting in a surprise of +38.26%. Over the last four quarters, the company has beaten consensus EPS estimates three times [12][13]. Investment Considerations - While a potential earnings beat is a positive indicator, other factors may also influence stock performance, making it essential to consider the broader context [14][16].

Group 1 - Travelers Companies, Inc. (TRV) is currently trading below its 50-day simple moving average, indicating a short-term bearish trend, with a share price of $236.93, down 12.1% from its 52-week high of $269.56 [1][3] - The company has a market capitalization of $53.8 billion and is a leading writer of auto and homeowners' insurance as well as commercial U.S. property-casualty insurance, poised to benefit from strong renewal rates and new business growth [2][20] - Over the past six months, TRV shares have gained 8.8%, outperforming the industry increase of 1.7%, sector rise of 4.2%, and the S&P 500 composite gain of 3.5% [5][6] Group 2 - The Zacks average price target for TRV is $268.50 per share, suggesting a potential upside of 15.1% from the current closing price [8] - The return on equity (ROE) for the trailing 12 months is 17.7%, significantly higher than the industry average of 7.6%, indicating efficient use of shareholders' funds [10] - The return on invested capital (ROIC) for TRV is 9.9%, compared to the industry average of 5.8%, reflecting effective capital utilization [11] Group 3 - The Zacks Consensus Estimate for 2025 earnings is $20.54, representing an 8.7% increase on revenues of $49.8 billion, with a long-term earnings growth rate expected at 11.2% [12] - Factors contributing to Travelers' growth include solid retention rates, better pricing, increased new business, and a strong product portfolio across nine lines of business [13] - Travelers estimates net investment income (NII) to be $2.9 billion in 2025, with growth expected throughout the year [14] Group 4 - The company maintains a conservative balance sheet, focusing on effective capital deployment and keeping the debt-to-capital ratio between 15% and 25% [15] - Approximately 10.4% of Travelers' direct written premiums in 2024 are from California, where ongoing wildfires may impact underwriting profitability [16] - TRV shares are trading at a premium with a price-to-book value of 1.94X, higher than the industry average of 1.49X, indicating a strong value score [17] Group 5 - Travelers has a strong market presence in auto, homeowners' insurance, and commercial U.S. property-casualty insurance, supported by solid capital position and inorganic growth [20] - The company has a history of increasing dividends for the last 20 years, with a dividend yield of 1.8%, attractive compared to the industry average of 0.3% [21] - Despite premium valuation and exposure to catastrophes, the stock remains a favorite among investors, supported by a solid VGM Score of A and a favorable target price [22]

Core Viewpoint - Travelers (TRV) has experienced a downtrend with a 5.3% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to analysts' positive earnings outlook [1]. Group 1: Stock Performance and Technical Indicators - The stock has been under significant selling pressure, leading to an RSI reading of 24.79, indicating it is oversold [5]. - The Relative Strength Index (RSI) is a momentum oscillator that helps identify oversold conditions when the reading falls below 30 [2]. - Stocks oscillate between overbought and oversold states, and an oversold condition may present entry opportunities for investors anticipating a rebound [3]. Group 2: Earnings Estimates and Analyst Consensus - There is a strong consensus among sell-side analysts to raise earnings estimates for TRV, resulting in a 0.2% increase in the consensus EPS estimate over the last 30 days [6]. - An upward trend in earnings estimate revisions typically correlates with price appreciation in the near term [6]. - TRV holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate trends and EPS surprises, indicating a strong potential for a turnaround [7].

Core Insights - Travelers Companies, Inc. (NYSE: TRV) provides a diverse range of commercial, personal, and casualty insurance products and services to businesses, government, and individuals, making it one of the oldest insurance organizations in the U.S. [1] Company Overview - The company has a strong focus on fundamental analysis and disciplined market research, indicating a commitment to identifying investment opportunities based on solid financial metrics [1]. - Travelers aims to identify small-cap companies with strong fundamentals and growth potential, large-cap companies experiencing temporary setbacks, and stable companies with solid dividend yields and growth potential [1]. Analyst Position - The analyst has disclosed a beneficial long position in the shares of TRV, indicating confidence in the company's future performance [2].

Group 1: Company Performance - Travelers (TRV) has achieved a year-to-date return of 27.5%, outperforming the Finance sector average return of 21.6% [3] - The Zacks Consensus Estimate for TRV's full-year earnings has increased by 9.7% over the past quarter, indicating improved analyst sentiment and a more positive earnings outlook [7] - BGC Group (BGC) has also shown strong performance with a year-to-date return of 25.2% [8] Group 2: Industry Rankings - Travelers is part of the Insurance - Property and Casualty industry, which ranks 20 in the Zacks Industry Rank, with an average gain of 27.4% year-to-date [10] - BGC Group belongs to the Financial - Investment Bank industry, currently ranked 47, which has seen a year-to-date increase of 40.4% [9] - The Finance sector, which includes 871 individual stocks, holds a Zacks Sector Rank of 3, indicating a relatively strong performance compared to other sectors [6]