Chubb Stock Trades Above 200-Day SMA: What Should Investors Do?

Chubb Limited CB has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price, as of June 11, 2025, was $285.61, down 6.9% from its 52-week high of $306.91.The 200-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.CB Price Movement vs. 200-Day Moving AverageImage Source: Zacks Investment ResearchWith a market capitalization of $114.45 billion, the average volume of shares traded in the last three months was 1.7 million.Expensive ValuationThe insurer’s shares are trading at a price-to-book value of 1.62, higher than the industry average of 1.56. Also, it has a Value Score of B. Chubb is, however, cheaper compared with Palomar Holdings, Inc. PLMR, Arch Capital Group Ltd. ACGL and The Travelers Companies, Inc. TRV.Image Source: Zacks Investment ResearchCB’s Price PerformanceShares of Chubb have gained 3.4% in the year-to-date (YTD) period, underperforming the industry’s growth of 7.9% and the Finance sector’s return of 5.7%. It, however, outperformed the S&P 500 composite’s return of 2.1% in the YTD period.Image Source: Zacks Investment ResearchCB’s Growth Projection EncouragesThe Zacks Consensus Estimate for Chubb’s 2025 revenues is pegged at $59.74 billion, implying a year-over-year improvement of 6.2%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 19.1% and 6.6%, respectively, from the corresponding 2025 estimates.Optimist Analyst Sentiment on CBNine of the 11 analysts covering the stock have raised estimates for 2025 and 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 earnings has moved up 1.7% in the past 60 days, and for 2026, the same has moved north 0.3% in the same time frame.Image Source: Zacks Investment ResearchTarget Price Reflects Potential UpsideBased on short-term price targets offered by 20 analysts, the Zacks average price target is $308.15 per share. The average indicates a potential 7.6% upside from the last closing price.Image Source: Zacks Investment ResearchImpressive Earnings Surprise History of CBChubb’s bottom line surpassed earnings estimates in each of the last four quarters, the average being 11.48%.CB’s Favorable Return on CapitalReturn on equity in the trailing 12 months was 12.3%, better than the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders. Image Source: Zacks Investment ResearchAlso, return on invested capital (ROIC) has been increasing over the last few quarters amid capital investments made over the same time frame. This reflects CB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 8%, better than the industry average of 5.95%.Image Source: Zacks Investment ResearchFactors Benefiting CB StockChubb remains focused on capitalizing on the potential of middle-market businesses (both domestic and international) as well as enhancing traditional core packages and specialty products for long-term growth. In its efforts to accelerate growth, Chubb is also making strategic investments in various initiatives. Chubb pursues strategic mergers and acquisitions to diversify its portfolio, add capabilities and synergies, and expand its geographic footprint. Recently, Chubb agreed to acquire the insurance businesses of Liberty Mutual in Thailand and Vietnam. Acquisitions have also improved premium revenues. Premiums should also benefit from commercial P&C rate increases, new business and strong renewal retention. An impressive inorganic growth story helps to achieve a higher long-term return on equity. Though the Fed has started lowering the interest rate, investment income should benefit from improving operating cash flow. Chubb expects the quarterly adjusted net investment income to have a run rate between $1.67 billion and $1.75 billion over the next six months.Chubb has a strong capital position and sufficient cash-generation capabilities, which support wealth distribution to shareholders and growth initiatives. Being a P&C insurer, CB is exposed to catastrophe events, which induce volatility in underwriting profitability and affect the combined ratio. Given the uncertainty surrounding the magnitude of cat loss, higher losses could drain earnings. Also, Chubb’s leverage and times interest earned compare unfavorably with the industry.Final Take on CBChubb’s market-leading position, compelling portfolio, strong renewal retention, positive rate increases, solid capital position and better return on capital pave the way for long-term growth. The insurer’s dividend history is impressive. It has increased dividends for 31 straight years and is set to hike them again this year by 6.5%. CB has a dividend yield of 1.27%, better than the industry average of 0.2%.  However, given its premium valuation and unfavorable leverage and times interest earned, we prefer to stay cautious on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report Chubb Limited (CB): Free Stock Analysis Report Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report Palomar Holdings, Inc. (PLMR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks