Progressive (PGR) to Report Q2 Earnings: What to Expect?
The Progressive Corporation PGR is slated to report second-quarter 2023 earnings on Jul 13, before the opening bell. The company’s earnings missed estimates in the last reported quarter.
Factors to Note
Progressive’s compelling product portfolio, its leadership position, strength in the Vehicle and Property businesses, healthy policies in force and solid retention are likely to have favored net premiums earned in the quarter under review. The Zacks Consensus Estimate for net premiums earned is pegged at $14.3 billion, suggesting growth of 17.4% from the year-ago reported number. We estimate net premiums earned of $12.9 billion for the to-be-reported quarter.
Segmentation and prudent risk selection have likely aided policies in force. The Zacks Consensus Estimate for personal lines’ policies in force is pegged at 24.8 million, indicating an improvement of 9.7% from the year-ago reported figure. We estimate policies in force of 28.4 million for the to-be-reported quarter.
Focus on marketing and competitive product offerings, and a strong market presence are likely to have aided PGR’s personal auto business. Increased travel across the world is likely to have induced higher auto premiums.
A higher invested asset base and higher interest rates are likely to have aided net investment income. The Zacks Consensus Estimate for the metric is pegged at $434 million, up 48.6% from the year-ago reported quarter. We estimate a net investment income of $325.2 million in the to-be-reported quarter.
The top line is likely to have benefited from higher premiums, increased net investment income, a rise in service revenues as well as fees and other revenues. The Zacks Consensus Estimate for second-quarter revenues is pinned at $15 billion, suggesting year-over-year growth of 18.3%.
Expenses are likely to have risen on higher loss and loss-adjustment expenses, policy acquisition costs, and other underwriting expenses. Total operating expenses are likely to increase 0.6% year over year to $12.7 billion. The consensus mark for the loss and loss-adjustment expense ratio is pegged at 79.
The Zacks Consensus Estimate for earnings is pegged at 91 cents, indicating a 4.2% decline from the year-ago quarter’s 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 a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
Earnings ESP: Progressive has an Earnings ESP of -4.63%. This is because the Most Accurate Estimate of 87 cents is lower than the Zacks Consensus Estimate of 91 cents. 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 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are three P&C insurance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Kinsale Capital Group KNSL has an Earnings ESP of +2.70% and currently sports a Zacks Rank of 1. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.55, indicating an increase of 32.8% from the year-ago reported figure.
KNSL’s earnings beat estimates in the last four reported quarters.
Chubb Limited CB has an Earnings ESP of +0.08% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $4.44, indicating a year over year increase of 5.7%.
CB’s earnings beat estimates in three of the last four reported quarters and missed in one.
RLI Corporation RLI has an Earnings ESP of +8.33% and currently flaunts a Zacks Rank of 1. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.20, implying a decline of 19.5% from the year-ago reported figure.
RLI’s earnings beat estimates in the last four reported quarters.
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Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
