On Feb 22, Zacks Investment Research upgraded Fidelity National Financial, Inc. (FNF) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Fidelity National has been witnessing rising earnings estimates on the back of solid fourth-quarter 2013 results. Moreover, this well-known property and casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 9.5%. The long-term expected earnings growth rate for this stock is 2%.

Fidelity National reported fourth-quarter results on Feb 12. Non-GAAP earnings per share came in at 43 cents, surpassing the Zacks Consensus Estimate by 19.4%. However, earnings declined 40% year over year.

Nonetheless, the company witnessed a 3.2% decline in expenses year over year, attributable to lower personnel costs and other operating expenses. Fidelity National recognized an estimated $150 million in annualized synergies. It is targeting $180 million to $190 million by the end of the first quarter and at least $225 million by the end of the second quarter.

Fidelity National also targets debt-to-total-capital ratio at around 35% at the end of the first quarter.

The Zacks Consensus Estimate for earnings in 2014 increased 8.2% to $2.10 per share as half of the estimates were revised higher over the last 30 days. For 2015, 1 of 3 estimates was revised higher over the same time frame, lifting the Zacks Consensus Estimate for the year by 7.5% to $2.29 per share.

Other Stocks to Consider

Other players in the property and casualty industry that look attractive at current levels include ACE Ltd. (ACE), AmTrust Financial Services, Inc, (AFSI) and RLI Corp. (RLI). All these stocks carry the same Zacks Rank as Fidelity National.

Read the Full Research Report on FNF
Read the Full Research Report on RLI
Read the Full Research Report on ACE
Read the Full Research Report on AFSI


Zacks Investment Research