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Category: Stock Market and Loews Corporation (L)
Date: 4 August 2020 Stock Price of Loews: $35.60 We take a look at the 2nd quarter earnings report of their 2020 fiscal year of Loews, an investment company that holds a wide variety of publicly and privately traded companies. A big holding of the group is active in the hotels and accommodation industry which has been severely hit by the coronavirus pandemic. The Covid-19 has hit some of the group's holdings hard and is reflected in a significant reduction in their book value per share.
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The economic disruption caused by the COVID-19 pandemic and measures to mitigate the spread of the virus significantly affected Loews's results in the first half of 2020. The full impact of COVID-19 on Loews and our businesses will be dependent on the pandemic's duration and scope and economic policies and other responses to the pandemic."
About Loews
Loews Corporation is one of the largest diversified companies in the United States, with businesses in the insurance, energy, hospitality and packaging industries. Our subsidiaries are: CNA Financial (NYSE: CNA), Diamond Offshore (NYSE: DO), Boardwalk Pipeline, Loews Hotels and Consolidated Container. Loews is focused on long-term value creation for its shareholders, and conservative financial management.
Loews’s multi-industry holding company structure is a key factor in our ability to create value, providing us with the freedom to make investments across a broad spectrum of industries, wherever we perceive the opportunity to enhance returns to our shareholders. Loews is traded on the New York Stock Exchange under the symbol L.
Loews’s multi-industry holding company structure is a key factor in our ability to create value, providing us with the freedom to make investments across a broad spectrum of industries, wherever we perceive the opportunity to enhance returns to our shareholders. Loews is traded on the New York Stock Exchange under the symbol L.
Loews subsidiaries
Overview of Loews' 2nd quarter 2020 earnings report
Data below refers to the latest quarter unless specified otherwise:
Net income or loss per segment for the 2nd quarter of 2020 (in $ millions):
- Revenues: $2.310 billion (down from $3.623 billion for the same period of the previous year)
- Revenues decreased by -36.2% over the last 12 months
- Net loss: -$835 million (down from a profit of $249 million from for the same period of the previous year)
- Diluted loss per share: -$2.96 (down from a profit of $0.82 for the same period of the previous year)
- Diluted weighted-average shares outstanding: 281.48 million (down from 304.54 million for the same period of the previous year)
- Book value per share (excluding accumulated other comprehensive income): $61.33 (down from $65.94 for the same quarter of the previous year)
Net income or loss per segment for the 2nd quarter of 2020 (in $ millions):
- CNA Financial: 135
- Diamond Offshore: (24)
- Boardwalk Pipelines: 34
- Loews Hotels & Co: (72)
- Corporate: Investment income (loss), net: 76
- Other: (994)
Loews' management commentary on their 2nd quarter 2020 results
NEW YORK, Aug. 3, 2020 /PRNewswire/ -- Loews Corporation (NYSE: L) today reported a net loss of $835 million, or $2.96 per share, for the three months ended June 30, 2020, compared to net income of $249 million, or $0.82 per share, in the second quarter of 2019. Net loss for the six months ended June 30, 2020 was $1.47 billion, or $5.16 per share, compared to net income of $643 million, or $2.09 per share, for the six months ended June 30, 2019.
The net loss for the three months ended June 30, 2020, was driven by (i) an investment loss of $957 million to write down the carrying value of our interest in Diamond Offshore Drilling, Inc. as a result of its bankruptcy filing on April 26, 2020, (ii) significant catastrophe losses at CNA Financial Corporation, and (iii) operating losses at Loews Hotels & Co. These factors were partially offset by increased net investment income at CNA and the parent company as well as investment gains at CNA.
The net loss for the six months ended June 30, 2020, was caused by (i) the investment loss from the write down of our Diamond Offshore carrying value discussed above, (ii) Diamond Offshore drilling rig impairment charges of $408 million in the first quarter of 2020, (iii) catastrophe losses at CNA, (iv) operating losses at Loews Hotels, and (v) investment losses at CNA in 2020 as compared to gains in the first six months of 2019.
The net loss for the three months ended June 30, 2020, was driven by (i) an investment loss of $957 million to write down the carrying value of our interest in Diamond Offshore Drilling, Inc. as a result of its bankruptcy filing on April 26, 2020, (ii) significant catastrophe losses at CNA Financial Corporation, and (iii) operating losses at Loews Hotels & Co. These factors were partially offset by increased net investment income at CNA and the parent company as well as investment gains at CNA.
The net loss for the six months ended June 30, 2020, was caused by (i) the investment loss from the write down of our Diamond Offshore carrying value discussed above, (ii) Diamond Offshore drilling rig impairment charges of $408 million in the first quarter of 2020, (iii) catastrophe losses at CNA, (iv) operating losses at Loews Hotels, and (v) investment losses at CNA in 2020 as compared to gains in the first six months of 2019.
The economic disruption caused by the COVID-19 pandemic and measures to mitigate the spread of the virus significantly affected Loews's results in the first half of 2020. The full impact of COVID-19 on Loews and our businesses will be dependent on the pandemic's duration and scope and economic policies and other responses to the pandemic.
Book value per share decreased to $61.35 at June 30, 2020 from $65.71 at December 31, 2019, driven by the net losses reported for the first six months of 2020. Book value per share excluding accumulated other comprehensive income (AOCI) decreased to $61.33 at June 30, 2020 from $65.94 at December 31, 2019.
SHARE REPURCHASES
At June 30, 2020, there were 280.4 million shares of Loews common stock outstanding. For the three and six months ended June 30, 2020, the Company repurchased 1.0 million and 10.7 million shares of its common stock for an aggregate cost of $33 million and $478 million. Depending on market conditions, the Company may from time to time purchase shares of its and its subsidiaries' outstanding common stock in the open market or otherwise. For the three and six months ended June 30, 2020, the Company purchased 0.6 million shares of CNA common stock for an aggregate cost of $19 million.
Book value per share decreased to $61.35 at June 30, 2020 from $65.71 at December 31, 2019, driven by the net losses reported for the first six months of 2020. Book value per share excluding accumulated other comprehensive income (AOCI) decreased to $61.33 at June 30, 2020 from $65.94 at December 31, 2019.
SHARE REPURCHASES
At June 30, 2020, there were 280.4 million shares of Loews common stock outstanding. For the three and six months ended June 30, 2020, the Company repurchased 1.0 million and 10.7 million shares of its common stock for an aggregate cost of $33 million and $478 million. Depending on market conditions, the Company may from time to time purchase shares of its and its subsidiaries' outstanding common stock in the open market or otherwise. For the three and six months ended June 30, 2020, the Company purchased 0.6 million shares of CNA common stock for an aggregate cost of $19 million.
Loews Corporation (NYSE: L) stock price history
The image below, obtained from Google, shows the stock price history of Loews over the last 5 years. And its not been the best time for Loews stockholders. 5 years ago the stock was trading at around $38 a stock and its currently trading at $35.60 a stock. Thats a loss of -6.3% suffered by Loews stockholders over the last 5 years.
The stock of Loews is trading at closer to its 52 week low than it is to its 52 week high, which to us is an indication that the short term sentiment and momentum of Loews stock is negative right now
The stock of Loews is trading at closer to its 52 week low than it is to its 52 week high, which to us is an indication that the short term sentiment and momentum of Loews stock is negative right now
Loews Corporation (NYSE: L) stock price history over the last 5 years
Loews (L) stock vs Berkshire Hathaway (BRKA) stock performance over last 5 years
The image below shows the stock price performance of Loews (L) and Berkshire Hathaway (BRKA) over the last 5 years. So why are we comparing these two stocks? Both companies are known as holding companies, with their main business activity being holding large stocks in a wide variety of firms. The summary below shows the stock price returns of Loews and Berkshire.
- Loews (L): -2.33%
- Berkshire Hathaway (BRKA): 47.53%
Loews (L) stock vs Berkshire Hathaway (BRKA) stock performance over last 5 years
Recent coverage of Loews
The extract below discusses the latest news regarding Loews as obtained from Nasdaq.com
(RTTNews) - Loews Corp. (L) on Monday reported a second-quarter net loss of $835 million or $2.96 per share, compared to net income of $249 million, or $0.82 per share in the prior-year quarter. The net loss was attributable mainly to an investment loss of $957 million to write down the carrying value of interest in Diamond Offshore Drilling, Inc. as a result of its bankruptcy filing on April 26, 2020, significant catastrophe losses at CNA Financial Corp., and operating losses at Loews Hotels & Co.
These factors were partially offset by increased net investment income at CNA and the parent company as well as investment gains at CNA. Total revenues for the quarter also decreased to $2.31 billion from $3.62 billion in the same quarter last year
Read the full article here
(RTTNews) - Loews Corp. (L) on Monday reported a second-quarter net loss of $835 million or $2.96 per share, compared to net income of $249 million, or $0.82 per share in the prior-year quarter. The net loss was attributable mainly to an investment loss of $957 million to write down the carrying value of interest in Diamond Offshore Drilling, Inc. as a result of its bankruptcy filing on April 26, 2020, significant catastrophe losses at CNA Financial Corp., and operating losses at Loews Hotels & Co.
These factors were partially offset by increased net investment income at CNA and the parent company as well as investment gains at CNA. Total revenues for the quarter also decreased to $2.31 billion from $3.62 billion in the same quarter last year
Read the full article here
View from Loews Hotel in Arlington, Texas
Loews (NYSE: L) latest stock valuation
So what is Loews stock worth based on the release of their latest earnings report? Since Loews is a holding and investment company our valuation is based on their book value per share of $64.17 instead of looking at their earnings or cash generated. And most investment and holding companies tend to trade at a discount of around 10% to their book value. We therefore have a target price or full value price for the stock of Loews at $57.80 a stock and therefore believe the stock of Loews is undervalued
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $57.80. Therefore we believe a good entry point into Loews stock is at $52.20 or below. Since Loews is currently trading at below our suggested entry point into the stock we rate the stock of Loews as a buy
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $57.80. Therefore we believe a good entry point into Loews stock is at $52.20 or below. Since Loews is currently trading at below our suggested entry point into the stock we rate the stock of Loews as a buy
Next earnings release date for Loews Corporation
It is expected that Loews 3rd quarter 2020 earnings report will be released in early November 2020