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Progressive (PGR) Stock Jumps 5.7%: Will It Continue to Soar?

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Progressive (PGR - Free Report) shares soared 5.7% in the last trading session to close at $115.99. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6% loss over the past four weeks.

Recently, PGR reported its monthly results for May where earnings per share of 15 cents for May 2022 that dropped 73% year over year. However, operating revenues improving owing to an increase in premiums, jump in service revenues, higher investment income, and higher fees. In May, policies in force were impressive for both Vehicle and Property businesses.

Progressive should continue to gain on higher premiums, given its compelling product portfolio, leadership position and strength in both Vehicle and Property businesses. Rates are very competitive in all its markets and it continues to gain from its expanded multi-product offering.

Several strategic endeavors that are aimed at providing consumers with a distinctive new auto insurance option should help Progressive maintain solid policy life expectancy (PLE), a measure for customer retention.

This insurer is expected to post quarterly earnings of $0.94 per share in its upcoming report, which represents a year-over-year change of -37.8%. Revenues are expected to be $12.67 billion, up 10.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Progressive, the consensus EPS estimate for the quarter has been revised 5.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on PGR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Progressive is part of the Zacks Insurance - Property and Casualty industry. Selective Insurance (SIGI - Free Report) , another stock in the same industry, closed the last trading session 4.2% higher at $82.61. SIGI has returned 2.5% in the past month.

Selective Insurance's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.31. Compared to the company's year-ago EPS, this represents a change of -29.2%. Selective Insurance currently boasts a Zacks Rank of #3 (Hold).


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