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Here's Why Progressive (PGR) Fell More Than Broader Market

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Progressive (PGR - Free Report) closed at $280.96 in the latest trading session, marking a -1.63% move from the prior day. The stock's change was less than the S&P 500's daily loss of 1.61%. Elsewhere, the Dow saw a downswing of 1.91%, while the tech-heavy Nasdaq depreciated by 1.41%.

Shares of the insurer witnessed a gain of 7.75% over the previous month, trailing the performance of the Finance sector with its gain of 9.17% and the S&P 500's gain of 12.65%.

The investment community will be paying close attention to the earnings performance of Progressive in its upcoming release. On that day, Progressive is projected to report earnings of $3.53 per share, which would represent year-over-year growth of 33.21%. Meanwhile, the latest consensus estimate predicts the revenue to be $21.6 billion, indicating a 18.28% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $15.80 per share and revenue of $87.5 billion, which would represent changes of +12.46% and +16.5%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Progressive. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.81% higher. Progressive is currently sporting a Zacks Rank of #2 (Buy).

Looking at valuation, Progressive is presently trading at a Forward P/E ratio of 18.07. This indicates a premium in contrast to its industry's Forward P/E of 12.

It's also important to note that PGR currently trades at a PEG ratio of 1.77. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Insurance - Property and Casualty industry currently had an average PEG ratio of 2.74 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. Currently, this industry holds a Zacks Industry Rank of 49, positioning it in the top 20% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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