On Mar 20, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Estimates of Progressive have remained steady following strong
fourth-quarter results and a special dividend payout on the back
of consistent improvement in operating leverage. A strong balance
sheet and favorable financial strength rating also augur
long-term growth for this property-casualty insurer. The
long-term expected earnings growth rate for this stock is
On Jan 18, Progressive reported fourth-quarter operating
earnings of 41 cents per share, which surpassed the Zacks
Consensus Estimate of 34 cents. Earnings were primarily driven by
9% year over year growth in net premiums and 111% escalation in
net realized investment gains. The upsides were partially offset
by higher claims and expenses that also deteriorated the combined
Meanwhile, Progressive publishes monthly financial reports.
The company's operating earnings and premiums' growth as well as
debt-to-total capital ratio in January and February of this year
have also reflected overall constant improvement.
Progressive remains focused on maintaining a healthy policy
life expectancy, which is a significant measure to retain
customers. The Commercial Auto business is also exhibiting
improvement by recording year-over-year growth over the past few
months. Going ahead, we believe that the company is poised to
benefit from impressive operating performances and its market
Based on the progress and a total of 39 cents generated in Jan
and Feb, Progressive will likely beat the year-ago earnings and
the Zacks Consensus Estimate of 42 cents, in the first-quarter of
Over the last 60 days, 11 of 16 estimates were revised upward
with just 1 downward revision, which pushed the Zacks Consensus
Estimate for 2013 up by a cent to $1.49 per share. For 2014, 5
out of the 17 estimates were revised upward over the last 60
days, while 2 were revised downward. This lowered the Zacks
Consensus Estimate by a penny to $1.59.
Other Stocks to Consider
Apart from Progressive, other stocks that are outperforming in
the insurance sector include
CNO Financial Group Inc.
XL Group Plc
Montpelier Re Holdings Ltd.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
CNO FINL GRP (CNO): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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