CB Stock Trading at a Discount to Industry at 1.49X: Time to Hold?

Core Insights - Chubb Limited (CB) shares are trading at a discount compared to the Zacks Property and Casualty Insurance industry, with a forward price-to-earnings multiple of 1.49X, lower than the industry average of 1.54X, the Finance sector's 4.27X, and the Zacks S&P 500 Composite's 8.52X [1] - The company has a market capitalization of $110.61 billion and an average trading volume of 1.8 million shares over the last three months [1] Price Performance - Chubb Limited shares closed at $277.45, above the 50-day simple moving average of $274.76, indicating solid upward momentum [3] - Year-to-date, shares have risen 0.4%, while the industry has grown by 7.7% [4] Growth Projections - The Zacks Consensus Estimate for Chubb's 2025 revenues is $59.41 billion, reflecting a year-over-year improvement of 5.6% [8] - For 2026, earnings per share and revenues are expected to increase by 17.6% and 6.3%, respectively, compared to 2025 estimates [8] Analyst Sentiment - Nine out of twelve analysts have raised their estimates for 2025, with five also increasing estimates for 2026 over the past 60 days [9] - The consensus estimate for 2025 earnings has increased by 1.7%, while the 2026 estimate has risen by 0.4% during the same period [9] Target Price - The average price target from 22 analysts is $303.18 per share, indicating a potential upside of 9.46% from the last closing price [10] Earnings Performance - Chubb Limited has consistently surpassed earnings estimates in the last four quarters, with an average surprise of 10.85% [13] Return on Capital - The return on equity for Chubb in the trailing 12 months was 12.3%, exceeding the industry average of 7.6% [14] - Return on invested capital (ROIC) was 8%, better than the industry average of 5.8%, indicating effective utilization of funds [15] Strategic Initiatives - Chubb Limited is focused on capitalizing on middle-market businesses and enhancing its core and specialty product offerings for long-term growth [16] - The company is pursuing strategic mergers and acquisitions, including the recent agreement to acquire Liberty Mutual's insurance businesses in Thailand and Vietnam, which is expected to improve premium revenues [17] Investment Income Outlook - Despite the Federal Reserve lowering interest rates, Chubb anticipates improved operating cash flow, with expected quarterly adjusted net investment income between $1.72 billion and $1.74 billion in Q3 2025 [18] Dividend History - Chubb has a strong dividend history, having increased dividends for 31 consecutive years, with a planned hike of 6.5% this year, resulting in a dividend yield of 1.43%, significantly higher than the industry average of 0.2% [20]