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Progressive (PGR) to Report Q1 Earnings: Is a Beat in Store?

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The Progressive Corporation (PGR - Free Report) is slated to report first-quarter 2020 results on Apr 15, before market open. The company delivered a positive earnings surprise in the last two reported quarters.

Factors to Consider

Progressive’s first-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 an increase in business volumes.
Policies in force have been benefiting from the focus on segmentation and risk selection. The Zacks Consensus Estimate for personal lines policies in force is pegged at 19,918 million, indicating an increase of 8.6% from the year-ago reported quarter.

Improved premiums, increase in service revenues and fees, and other revenues are likely to have driven overall revenues. The Zacks Consensus Estimate for first-quarter revenues stands at $9.92 billion, suggesting 11.7% 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. The company 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. Also, a decline in driving, as people in the United States are increasingly staying indoor due to the COVID-19 outbreak, is likely to have led to lower claims, thus aiding margins.

Strong 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 Agency and Direct channels.

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

Expenses are likely to have risen on higher loss and loss-adjustment expenses, policy acquisition, service expense costs, and other underwriting expenses.

The Zacks Consensus Estimate for earnings is pegged at $1.46, indicating a 20.22% decline from the year-ago quarter's reported number.

What Our Quantitative Model Predicts

Our proven model predicts 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.

Earnings ESP: Progressive has an Earnings ESP of +0.06%. This is because the Most Accurate Estimate of $1.46 is equal to the Zacks Consensus Estimate of $1.46. You can uncover the best stocks to buy or sell before they’re 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 other stocks from the finance industry, with the combination of elements to surpass estimates this reporting cycle are as follows:

American Financial Group (AFG - Free Report) has an Earnings ESP of +3.94% and a Zacks Rank of 3 at present. The company is slated to announce first-quarter 2020 earnings on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Markel Corporation (MKL - Free Report) currently has an Earnings ESP of +27.42% and a Zacks Rank #3. The company is slated to announce first-quarter 2020 results on May 5.

ProAssurance Corporation (PRA - Free Report) is set to report first-quarter 2020 results on May 7. The company presently has an Earnings ESP of +3.70% and a Zacks Rank of 2.

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