Analysts Estimate American Financial Group (AFG) to Report a Decline in Earnings: What to Look Out for

Core Viewpoint - American Financial Group (AFG) is expected to report a year-over-year decline in earnings and revenues for the quarter ended December 2023, with earnings anticipated at $2.81 per share, reflecting a -6% change, and revenues projected at $1.87 billion, down 1.8% from the previous year [2][5]. Earnings Expectations - The earnings report is scheduled for release on February 6, 2024, and the actual results will significantly influence the stock price, depending on whether they meet or exceed expectations [1]. - The consensus EPS estimate has been revised down by 0.79% over the last 30 days, indicating a bearish sentiment among analysts [2]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for AFG is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.14%, suggesting a potential earnings miss [3][5]. - A positive Earnings ESP is generally a strong predictor of an earnings beat, especially when combined with a favorable Zacks Rank [4]. Historical Performance - In the last reported quarter, AFG was expected to post earnings of $2.47 per share but delivered $2.45, resulting in a surprise of -0.81% [7]. - Over the past four quarters, AFG has beaten consensus EPS estimates two times, indicating some volatility in performance [7]. Investment Considerations - Despite the current Zacks Rank of 2 (Buy), the combination of a negative Earnings ESP makes it challenging to predict an earnings beat for AFG [5][6]. - Investors are advised to consider other factors beyond earnings surprises when making investment decisions regarding AFG [8].