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What's in Store for Progressive (PGR) This Earnings Season?
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The Progressive Corporation (PGR - Free Report) is slated to report fourth-quarter 2023 earnings on Jan 24 before the opening bell. The company’s earnings beat estimates in the last reported quarter.
Factors to Note
Net premiums earned are likely to have benefited from the company’s compelling product portfolio, leadership position, strength in the Vehicle and Property businesses, healthy policies in force and solid retention. The Zacks Consensus Estimate for net premiums earned is pegged at $15.2 billion, suggesting growth of 18.1% from the year-ago reported number. We estimate net premiums earned of $14.8 billion for the to-be-reported quarter, up 14.9% year over year.
Policies in force are likely to have been driven by PGR’s focus on segmentation and prudent risk selection. The Zacks Consensus Estimate for personal lines policies in force stands at 25.3 million, indicating an improvement of 7.8% from the year-ago reported figure. We estimate policies in force of 29.3 million in the to-be-reported quarter.
Focus on marketing and competitive product offerings and a strong market presence are likely to have aided the personal auto business.
A higher invested asset base and a higher interest rate are likely to have aided net investment income. The Zacks Consensus Estimate for the metric is pegged at $554 million. We estimate net investment income of $584.1 million in the to-be-reported quarter, up 49% year over year.
The top line is likely to have benefited from higher premiums earned, increased net investment income and a rise in service revenues and fees and other revenues. The Zacks Consensus Estimate for fourth-quarter revenues stands at $16.1 billion, suggesting year-over-year growth of approximately 18.9%. We estimate quarterly revenues to be $14.4 billion.
Higher loss and loss-adjustment expenses, policy acquisition costs and other underwriting expenses are likely to have raised expenses. We estimate total operating expenses to increase 13.8% to $14.2 billion. The consensus mark for loss and loss-adjustment expense ratio is pegged at 75.
The Zacks Consensus Estimate for earnings is pegged at $2.38, indicating a 58.7% surge from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Progressive this time. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here.
Earnings ESP: Progressive has an Earnings ESP of -1.87%. This is because the Most Accurate Estimate of $2.34 is pegged lower than the Zacks Consensus Estimate of $2.38. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The Progressive Corporation Price and EPS Surprise
Here are three P&C insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Chubb Limited (CB - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $5.04, indicating a year-over-year increase of 24.4%
CB’s earnings beat estimates in three of the last four reported quarters while missing in one.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $1.94, indicating a year-over-year decrease of 9.4%.
ACGL’s earnings beat estimates in each of the last four reported quarters.
Allstate Corporation (ALL - Free Report) has an Earnings ESP of +5.31% and currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $3.47, implying an increase of 355.2% from the year-ago reported figure.
ALL’s earnings beat estimates in three of the last four reported quarters while missing in one.
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What's in Store for Progressive (PGR) This Earnings Season?
The Progressive Corporation (PGR - Free Report) is slated to report fourth-quarter 2023 earnings on Jan 24 before the opening bell. The company’s earnings beat estimates in the last reported quarter.
Factors to Note
Net premiums earned are likely to have benefited from the company’s compelling product portfolio, leadership position, strength in the Vehicle and Property businesses, healthy policies in force and solid retention. The Zacks Consensus Estimate for net premiums earned is pegged at $15.2 billion, suggesting growth of 18.1% from the year-ago reported number. We estimate net premiums earned of $14.8 billion for the to-be-reported quarter, up 14.9% year over year.
Policies in force are likely to have been driven by PGR’s focus on segmentation and prudent risk selection. The Zacks Consensus Estimate for personal lines policies in force stands at 25.3 million, indicating an improvement of 7.8% from the year-ago reported figure. We estimate policies in force of 29.3 million in the to-be-reported quarter.
Focus on marketing and competitive product offerings and a strong market presence are likely to have aided the personal auto business.
A higher invested asset base and a higher interest rate are likely to have aided net investment income. The Zacks Consensus Estimate for the metric is pegged at $554 million. We estimate net investment income of $584.1 million in the to-be-reported quarter, up 49% year over year.
The top line is likely to have benefited from higher premiums earned, increased net investment income and a rise in service revenues and fees and other revenues. The Zacks Consensus Estimate for fourth-quarter revenues stands at $16.1 billion, suggesting year-over-year growth of approximately 18.9%. We estimate quarterly revenues to be $14.4 billion.
Higher loss and loss-adjustment expenses, policy acquisition costs and other underwriting expenses are likely to have raised expenses. We estimate total operating expenses to increase 13.8% to $14.2 billion. The consensus mark for loss and loss-adjustment expense ratio is pegged at 75.
The Zacks Consensus Estimate for earnings is pegged at $2.38, indicating a 58.7% surge from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Progressive this time. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here.
Earnings ESP: Progressive has an Earnings ESP of -1.87%. This is because the Most Accurate Estimate of $2.34 is pegged lower than the Zacks Consensus Estimate of $2.38. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
The Progressive Corporation Price and EPS Surprise
The Progressive Corporation price-eps-surprise | The Progressive Corporation Quote
Zacks Rank: PGR currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are three P&C insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Chubb Limited (CB - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $5.04, indicating a year-over-year increase of 24.4%
CB’s earnings beat estimates in three of the last four reported quarters while missing in one.
Arch Capital Group Ltd. (ACGL - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $1.94, indicating a year-over-year decrease of 9.4%.
ACGL’s earnings beat estimates in each of the last four reported quarters.
Allstate Corporation (ALL - Free Report) has an Earnings ESP of +5.31% and currently carries a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $3.47, implying an increase of 355.2% from the year-ago reported figure.
ALL’s earnings beat estimates in three of the last four reported quarters while missing in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.