Yahoo Finance The Progressive Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
The Progressive Corporation (NYSE:PGR) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat forecasts, with revenue of US$18b, some 2.5% above estimates, and statutory earnings per share (EPS) coming in at US$2.48, 40% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
See our latest analysis for Progressive
Taking into account the latest results, the consensus forecast from Progressive's twelve analysts is for revenues of US$73.9b in 2024. This reflects a meaningful 9.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 3.1% to US$12.08. In the lead-up to this report, the analysts had been modelling revenues of US$73.8b and earnings per share (EPS) of US$11.12 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at US$237, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Progressive, with the most bullish analyst valuing it at US$296 and the most bearish at US$144 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Progressive's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Progressive to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Progressive following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$237, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Progressive. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Progressive analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Progressive has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
