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Progressive (PGR) Up 7.7% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 7.7% 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 drivers.
Progressive's Q4 Earnings and Revenues Beat Estimates
The Progressive Corporation’s fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year.
Behind the Headlines
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 basis points (bps) from the prior-year quarter’s level to 88.7.
December Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 9% from the year-ago month’s figure to 19.5 million. Special Lines improved 5% to 6 million. In Progressive’s Personal Auto segment, Direct Auto increased 7% year over year to 8.3 million, while Agency Auto increased 10% to 11.2 million.
Progressive’s Commercial Auto segment rose 5% year over year to 1.1 million. The Property business had 3.1 million policies in force, up 9%.
Full-Year Numbers
Operating revenues were about $61.8 billion in 2023, up 19.9% year over year. This improvement was driven by a 19.1% increase in premiums, 23.1% higher fees and other revenues, a 3.6% increase in service revenues and 50.1% higher investment income. Total expenses increased 17.5% year over year to $57.2 billion due to 19.8% higher losses and loss adjustment expenses, 19.1% higher policy acquisition costs and a 6.5% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $33.80 as of Dec 31, 2023, up 28.9% from $26.32 on Dec 31, 2022. Return on equity in December 2023 was 30% compared with 13.5% a year ago. Total debt-to-total capital ratio improved 330 bps to 25.4.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 16.12% due to these changes.
VGM Scores
At this time, Progressive has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Progressive has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Progressive is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
Travelers reported revenues of $10.94 billion in the last reported quarter, representing a year-over-year change of +13.6%. EPS of $7.01 for the same period compares with $3.40 a year ago.
For the current quarter, Travelers is expected to post earnings of $4.74 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Travelers. Also, the stock has a VGM Score of B.
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Progressive (PGR) Up 7.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Progressive (PGR - Free Report) . Shares have added about 7.7% 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 drivers.
Progressive's Q4 Earnings and Revenues Beat Estimates
The Progressive Corporation’s fourth-quarter 2023 earnings per share of $2.96 beat the Zacks Consensus Estimate of $2.38. The bottom line improved 97.3% year over year.
Behind the Headlines
Net premiums written were $15.1 billion in the quarter, up 21% from $12.5 billion a year ago. Premiums beat our estimate of $14 billion. Net premiums earned grew 22% to $15.8 billion and beat our estimate of $14.8 billion.
Operating revenues of $16.6 billion beat the Zacks Consensus Estimate by 3% and increased 23.2% year over year.
Net realized gain on securities was $303.4 billion against a loss of $72.8 million in the year-ago quarter.
The combined ratio — the percentage of premiums paid out as claims and expenses — improved 520 basis points (bps) from the prior-year quarter’s level to 88.7.
December Policies in Force
Policies in force were solid in the Personal Auto segment, increasing 9% from the year-ago month’s figure to 19.5 million. Special Lines improved 5% to 6 million. In Progressive’s Personal Auto segment, Direct Auto increased 7% year over year to 8.3 million, while Agency Auto increased 10% to 11.2 million.
Progressive’s Commercial Auto segment rose 5% year over year to 1.1 million. The Property business had 3.1 million policies in force, up 9%.
Full-Year Numbers
Operating revenues were about $61.8 billion in 2023, up 19.9% year over year. This improvement was driven by a 19.1% increase in premiums, 23.1% higher fees and other revenues, a 3.6% increase in service revenues and 50.1% higher investment income. Total expenses increased 17.5% year over year to $57.2 billion due to 19.8% higher losses and loss adjustment expenses, 19.1% higher policy acquisition costs and a 6.5% rise in other underwriting expenses.
Financial Update
Progressive’s book value per share was $33.80 as of Dec 31, 2023, up 28.9% from $26.32 on Dec 31, 2022. Return on equity in December 2023 was 30% compared with 13.5% a year ago. Total debt-to-total capital ratio improved 330 bps to 25.4.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 16.12% due to these changes.
VGM Scores
At this time, Progressive has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Progressive has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Progressive is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Travelers (TRV - Free Report) , a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended December 2023 more than a month ago.
Travelers reported revenues of $10.94 billion in the last reported quarter, representing a year-over-year change of +13.6%. EPS of $7.01 for the same period compares with $3.40 a year ago.
For the current quarter, Travelers is expected to post earnings of $4.74 per share, indicating a change of +15.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Travelers. Also, the stock has a VGM Score of B.