The Progressive Corporation PGR is slated to report first-quarter 2023 earnings on Apr 13, before the opening bell. The company’s earnings beat 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. The Zacks Consensus Estimate for net premiums earned is pegged at $13.3 billion, suggesting growth of 12.5% from the year-ago reported number. We estimate net premiums earned of $12.3 billion for the to-be-reported quarter.
Policies in force are likely to have improved, given the focus on segmentation and prudent risk selection. The Zacks Consensus Estimate for personal lines policies in force stands at 24.5 million, indicating an improvement of 8.2% from the year-ago reported figure. We estimate policies in force of 24.3 million in the to-be-reported quarter.
Focus on marketing and competitive product offerings and strong market presence are likely to have aided PGR’s personal auto business.
A higher invested asset base and a higher interest rate are likely to have aided net investment income. The Zacks Consensus Estimate for the metric is pegged at $391.2 million, up 62% from the year-ago reported quarter. We estimate net investment income of $248.7 million in the to-be-reported quarter.
The top line is likely to have benefited from higher premiums, an increase in service revenues and fees and other revenues. The Zacks Consensus Estimate for first-quarter revenues stands at $14.1 billion, suggesting year-over-year growth of approximately 15%. We estimate quarterly revenues to be $13.1 billion.
Expenses are likely to have risen on a higher loss and loss-adjustment expenses, policy acquisition costs and other underwriting expenses. Total operating expenses are likely to increase 4.4% to $12 billion. The consensus mark for loss and loss-adjustment expense ratio is pegged at 73.5.
The Zacks Consensus Estimate for earnings is pegged at $1.46, indicating a 30.4% surge from the year-ago quarter reported figure. We estimate the bottom line to increase 34% to $1.50
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 -9.40%. This is because the Most Accurate Estimate of $1.32 is pegged lower than the Zacks Consensus Estimate of $1.46. 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 you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Kinsale Capital Group KNSL has an Earnings ESP of +3.34% and a Zacks Rank of 1. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $2.25, indicating an increase of 38% 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 +4.28% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $4.35, indicating an increase of 13.9%.
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 +0.27% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2023 earnings stands at $1.21, implying a decline of 15.4% from the year-ago reported quarter.
RLI’s earnings beat estimates in the last four reported quarters.
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