On Apr 2, 2013, shares of
) hit a 52-week high of $25.68. The company generated total of 39
cents in earnings in January and February, with premiums
increasing year over year in both the months.
Progressive's operating earnings and premiums' growth as well as
debt-to-total capital ratio in the first two months of this year
reflect overall constant improvement. Policies in force also
remained healthy. Progressive remains focused on maintaining a
healthy policy life expectancy, which is a significant measure to
Progressive delivered positive earnings surprise in two quarters
of 2012. However, average surprise was a negative 4.85% due to
poor performance in the second quarter. Nevertheless, our proven
model shows that the property & casualty insurer is likely to
beat earnings in the first quarter of 2013 because it has a right
combination of a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1 (Strong Buy). ESP or Expected Surprise
Prediction, which represents the difference between the Most
Accurate Estimate and the Zacks Consensus Estimate, is +4.65%.
Progressive is scheduled to release its first-quarter 2013
earnings results on Apr 10. The Zacks Consensus Estimate for the
first quarter is currently pegged at 43 cents, representing a
year-over-year increase of 1.3%.
Valuation for Progressive looks stretched. The shares are trading
at a considerable premium to the peer group average both on a
price-to-book basis and on a forward price-to-earnings basis.
Comparatively, return on equity is 29% higher than the peer group
Progressive presently carries a Zacks Rank #1 (Strong Buy).
Property and casualty insurers like
AXIS Capital Holdings Ltd
Montpelier Re Holdings Ltd
Arch Capital Group Ltd.
), among others, also carry a Zacks Rank #1 and appear
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PROGRESSIVE COR (PGR): Free Stock Analysis
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