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Can Progressive (PGR) Retain Its Earnings Beat Streak in Q1?

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The Progressive Corporation PGR is slated to report first-quarter 2021 results on Apr 15, before market open. The company delivered an surprise of 8.93% in the last reported quarter.

Factors to Consider

Premiums in the first quarter are likely to have benefited from its leadership position, strength in both Vehicle and Property businesses, solid policies in force, higher retention, competitive rates and compelling product portfolio. The Zacks Consensus Estimate for premiums earned is pegged at $11.1 billion.

Focus on segmentation and risk selection might have aided policies in force. The Zacks Consensus Estimate for personal lines policies in force is pegged at 21,959 million, indicating an increase of 10.5% from the year-ago reported quarter.

A near-zero interest rate likely have weighed on investment income. The Zacks Consensus Estimate is pegged at $209 million, indicating an increase of 10.3% from the year-ago reported quarter.

Improved premiums, increase in service revenues and fees as well as other revenues are likely to have fueled revenues. The Zacks Consensus Estimate for first-quarter revenues stands at $11.1 billion, suggesting nearly 12% year-over-year growth.

Progressive is a leading auto insurer in the United States, boasting one of the 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. Its personal auto business is likely to have benefited from its focus on marketing and competitive product offerings as well as strong market presence.

Expenses might have risen on higher loss and loss-adjustment expenses, and policy acquisition costs plus other underwriting expenses. The consensus estimate for Personal Line loss and loss adjustment expenses ratio is pegged at 65, flat with the year-ago quarter.

The Zacks Consensus Estimate for earnings is pegged at $1.78, indicating a 7.3% decrease from the year-ago quarter's reported number.

What the Zacks Model Says

Our proven model predicts an earnings beat for Progressive this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Progressive has an Earnings ESP of +1.39%. This is because the Most Accurate Estimate of $1.80 is pegged higher than the Zacks Consensus Estimate of $1.78. 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 and EPS Surprise
The Progressive Corporation Price and EPS Surprise

The Progressive Corporation price-eps-surprise | The Progressive Corporation Quote

Zacks Rank: Progressive currently carries a Zacks Rank of 3.

Other Key Picks

Some insurance stocks also with the right combination of elements to come up with an earnings beat this time around are:

NMI Holdings NMIH has an Earnings ESP of +5.49% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arch Capital Group ACGL has an Earnings ESP of +2.63% and a Zacks Rank #3.

Palomar Holdings PLMR has an Earnings ESP of +8.37% and a Zacks Rank of 3.

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The Progressive Corporation (PGR) : Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report

NMI Holdings Inc (NMIH) : Free Stock Analysis Report

Palomar Holdings, Inc. (PLMR) : Free Stock Analysis Report

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