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Progressive (PGR) Up 2.8% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Progressive Corporation (The) (PGR - Free Report) . Shares have added about 2.8% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Progressive Corp.’s fourth-quarter 2016 operating earnings per share of $0.64 per share surpassed the Zacks Consensus Estimate by 25.5%. Earnings improved nearly 19% year over year.
Including net realized losses, net income per share was $0.66 per share, up about 18% year over year.
Progressive recorded net premiums written of $5.6 billion in the quarter under review, up 15% from $4.8 billion in the year-ago quarter. Net premiums earned were about $5.8 billion, up 14% year over year from $5.2 billion.
Net realized gains on securities in the quarter were $22.1million, up 13% year over year. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 70 basis points (bps) from the prior-year quarter to 92.7%.
Numbers in December
Total operating revenue came in at $1.9 billion. The top line improved 14% year over year due to a 14% increase in premiums, 23% higher fees and other revenues, 8% rise in investment income and 17% growth in service revenues.
Total expense increased 14.6% to $1.7 billion. The increase in expenses can be primarily attributed to 15.9% higher losses and loss adjustment expenses, 13.6% increase in policy acquisition costs and 9% higher other underwriting expenses.
In Dec 2016, policies in force were impressive with the Personal Auto segment improving 8% from Dec 2015 to 10.4 million. Special Lines increased 4% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 9% year over year to 5.4 million. Agency Auto increased 7% from the comparable year-ago month to 5 million.
Progressive’s Commercial Auto segment grew 9% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 12% year over year.
Progressive’s book value per share was $13.72 as of Dec 31 2016, up 9.8% from $12.49 as of Dec 31, 2015.
Return on equity on a trailing 12-month basis was 14.9%, up 70 bps from 14.2% in Dec 2016. Debt-to-total capital ratio too deteriorated 120 bps year over year to 28.3% as of Dec 31, 2016.
Dividend Update
The board of directors announced an annual variable dividend of $0.6808 per share. The dividend will be paid on Feb 10, to shareholders on record as of Feb 3, 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been eight revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 17.4% due to these changes.
At this time, Progressive's stock has a subpar Growth Score of 'D', while it is doing a bit better on the momentum front with 'C'. Following the exact same course, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.
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Progressive (PGR) Up 2.8% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Progressive Corporation (The) (PGR - Free Report) . Shares have added about 2.8% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Progressive's (PGR - Free Report) Q4 Earnings Beat, Premiums Increase
Progressive Corp.’s fourth-quarter 2016 operating earnings per share of $0.64 per share surpassed the Zacks Consensus Estimate by 25.5%. Earnings improved nearly 19% year over year.
Including net realized losses, net income per share was $0.66 per share, up about 18% year over year.
Progressive recorded net premiums written of $5.6 billion in the quarter under review, up 15% from $4.8 billion in the year-ago quarter. Net premiums earned were about $5.8 billion, up 14% year over year from $5.2 billion.
Net realized gains on securities in the quarter were $22.1million, up 13% year over year. Combined ratio − the percentage of premiums paid out as claims and expenses − deteriorated 70 basis points (bps) from the prior-year quarter to 92.7%.
Numbers in December
Total operating revenue came in at $1.9 billion. The top line improved 14% year over year due to a 14% increase in premiums, 23% higher fees and other revenues, 8% rise in investment income and 17% growth in service revenues.
Total expense increased 14.6% to $1.7 billion. The increase in expenses can be primarily attributed to 15.9% higher losses and loss adjustment expenses, 13.6% increase in policy acquisition costs and 9% higher other underwriting expenses.
In Dec 2016, policies in force were impressive with the Personal Auto segment improving 8% from Dec 2015 to 10.4 million. Special Lines increased 4% from the prior-year month to 4.3 million.
In Progressive's Personal Auto segment, Direct Auto grew 9% year over year to 5.4 million. Agency Auto increased 7% from the comparable year-ago month to 5 million.
Progressive’s Commercial Auto segment grew 9% year over year to 0.6 million. The Property business had about 1.2 million policies in force in the reported month, up 12% year over year.
Progressive’s book value per share was $13.72 as of Dec 31 2016, up 9.8% from $12.49 as of Dec 31, 2015.
Return on equity on a trailing 12-month basis was 14.9%, up 70 bps from 14.2% in Dec 2016. Debt-to-total capital ratio too deteriorated 120 bps year over year to 28.3% as of Dec 31, 2016.
Dividend Update
The board of directors announced an annual variable dividend of $0.6808 per share. The dividend will be paid on Feb 10, to shareholders on record as of Feb 3, 2017.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been eight revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 17.4% due to these changes.
Progressive Corporation (The) Price and Consensus
Progressive Corporation (The) Price and Consensus | Progressive Corporation (The) Quote
VGM Scores
At this time, Progressive's stock has a subpar Growth Score of 'D', while it is doing a bit better on the momentum front with 'C'. Following the exact same course, the stock was allocated also a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is suitable for value and momentum investors.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. It comes with little surprise that the stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.