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Progressive (PGR) Up 5.5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Progressive 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 catalysts.
Progressive Q4 Earnings Top Estimates, Premiums Rise Y/Y
The Progressive Corporation’s fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year.
Behind the Headlines
Net premiums written were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago and beat our estimate of $12.2 billion.
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion.
Net realized loss on securities was $72.8 billion against a gain of $425.3 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 basis points (bps) from the prior-year quarter’s level to 93.9.
December Policies in Force
Policies in force were soft in the Personal Auto segment, increasing 3% from the year-ago month’s figure to 17.9 million. Special Lines improved 5% to 5.6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 6% year over year to 10.1 million, while Agency Auto dropped 1% to 7.8 million.
Progressive’s Commercial Auto segment rose 8% year over year to 1 million. The Property business had 2.9 million policies in force, up 3%.
Full-Year Numbers
Operating revenues were about $51.5 billion in 2022, up 11.5% year over year. This improvement was driven by an 11% increase in premiums, 4.4% higher fees and other revenues, a 10.3% increase in service revenues and 46.4% higher investment income.
Total expenses increased 12% year over year to $48.7 billion due to 13% higher losses and loss adjustment expenses,5% higher policy acquisition costs and a 4% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $26.32 as of Dec 31, 2022, down 13.3% from $30.35 on Dec 31, 2021.
Return on equity in December 2022 was -13.5%, down 2710 bps year over year. The total debt-to-total capital ratio deteriorated 750 bps to 28.7.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Progressive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Progressive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Progressive (PGR) Up 5.5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 5.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Progressive 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 catalysts.
Progressive Q4 Earnings Top Estimates, Premiums Rise Y/Y
The Progressive Corporation’s fourth-quarter 2022 earnings per share of $1.50 beat the Zacks Consensus Estimate of $1.49 as well as our estimate of $1.34. The bottom line improved 42.9% year over year.
Behind the Headlines
Net premiums written were $12.5 billion in the quarter, up 16% from $10.7 billion a year ago and beat our estimate of $12.2 billion.
Net premiums earned grew 11% to $12.9 billion and beat our estimate of $12.3 billion.
Net realized loss on securities was $72.8 billion against a gain of $425.3 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 80 basis points (bps) from the prior-year quarter’s level to 93.9.
December Policies in Force
Policies in force were soft in the Personal Auto segment, increasing 3% from the year-ago month’s figure to 17.9 million. Special Lines improved 5% to 5.6 million.
In Progressive’s Personal Auto segment, Direct Auto increased 6% year over year to 10.1 million, while Agency Auto dropped 1% to 7.8 million.
Progressive’s Commercial Auto segment rose 8% year over year to 1 million. The Property business had 2.9 million policies in force, up 3%.
Full-Year Numbers
Operating revenues were about $51.5 billion in 2022, up 11.5% year over year. This improvement was driven by an 11% increase in premiums, 4.4% higher fees and other revenues, a 10.3% increase in service revenues and 46.4% higher investment income.
Total expenses increased 12% year over year to $48.7 billion due to 13% higher losses and loss adjustment expenses,5% higher policy acquisition costs and a 4% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $26.32 as of Dec 31, 2022, down 13.3% from $30.35 on Dec 31, 2021.
Return on equity in December 2022 was -13.5%, down 2710 bps year over year. The total debt-to-total capital ratio deteriorated 750 bps to 28.7.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Progressive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Progressive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.