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Progressive (PGR) to Report Q4 Earnings: What's in Store?

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The Progressive Corporation PGR is slated to report fourth-quarter 2019 results on Jan 29, before market open. The company delivered a positive surprise in the last two reported quarters.

Factors to Consider

Progressive’s fourth-quarter premiums are likely to have benefited from solid policies in force, higher retention, competitive rates and compelling product portfolio.

Premiums might have benefited from increase in business volumes. Policies in force have been benefiting from focus on segmentation and risk selection. The Zacks Consensus Estimate for personal lines policies–in-force is pegged at 19,387 million, indicating an increase of 9.2% from the year-ago reported quarter.

Improved premiums, rise in investment income, increase in service revenues and fees as well as other revenues are likely to have driven revenues. The Zacks Consensus Estimate for fourth-quarter revenues stands at $9.59 billion, suggesting 11.4% growth from the year-earlier quarter's reported figure.

Meanwhile, Progressive’s personal auto business is likely to have benefited from its focus on marketing and competitive product offerings as well as strong market presence. Progressive is one of the leading auto insurers in the United States, boasting one of the nation’s largest auto insurance groups. It is also the largest seller of motorcycle policies, the market leader in commercial auto insurance and one of the top 15 homeowners carriers based on premiums written.

Strong performing Vehicle and Property businesses are expected to have supported Personal and Commercial business lines.

Progressive is also likely to have witnessed new business application growth in its bundled auto and home customers (i.e., Robinsons) in both the Agency and Direct channels.

A not-so-active catastrophe environment and competitive pricing might have aided underwriting profit.

Expenses are likely to have risen due to higher losses and settlement expenses plus policy acquisition costs.

The Zacks Consensus Estimate for earnings is pegged at $1.18, indicating 168% increase from the year-ago quarter's reported number.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for Progressive this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Progressive has an Earnings ESP of -1.45%. This is because the Most Accurate Estimate of $1.17 is pegged lower than the Zacks Consensus Estimate of $1.18. 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

Zacks Rank: Progressive carries a Zacks Rank of 3.

Stocks to Consider

Some stocks from the finance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

The Allstate Corporation ALL has an Earnings ESP of +2.01% and a Zacks Rank of 3. The company is slated to announce fourth-quarter 2019 earnings on Feb 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cincinnati Financial Corporation (CINF - Free Report) has an Earnings ESP of +1.95% and a Zacks Rank #3. The company is slated to announce fourth-quarter 2019 results on Feb 5.

CNA Financial Corporation CNA  is set to report fourth-quarter 2019 results on Feb 10. The stock has an Earnings ESP of +4.56% and a Zacks Rank of 3.

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