Zacks Investment Research upgraded shares of Cincinnati Financial Corp. (CINF) from NEUTRAL to OUTPERFORM on February 21, 2013, with a target price of $53.00.
We are upgrading our recommendation on the shares of Cincinnati Financial to Outperorm from Neutaral following its better than expected fourth quarter earnings. The company has also shown a favorable performance for the full year 2012. We expect the trend to continue led by numerous strategic growth initiatives undertaken by the management along with a gradually improving insurance market. Management is appointing agencies and expanding product offerings to compensate the decline in businesses. Low leverage, solid capital, consistent cash flow generation, favorable reserve release, share repurchases and dividend increase are among the other positives. However, its Personal line business remains prone to low earnings. Cincinnati is likely to witness limited investment growth owing to regular low yields for investment options. We expect pressure on the top line until the soft insurance market cycle reverses completely. Exposure to catastrophe also imparts earnings volatility.
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