) to beat expectations when it reports first-quarter 2013 results
on Apr 10.
Why a Likely Positive Surprise?
Our proven model shows that Progressive is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP
: The Most Accurate Estimate for the company is at 45 cents, and
the Zacks Consensus Estimate is at 43 cents. As a result,
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is at +4.65%.
Zacks Rank #1 (Strong Buy)
: Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of an earnings beat. The sell rated
stocks (#4 and #5) should never be considered going into an
The combination of Progressive's Zacks Rank # 1 (Strong Buy) and
+4.65% ESP makes us very confident regarding an earnings beat on
What is Driving the Better Than Expected
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 with both Personal Auto and Special Lines
delivering growth. Progressive remains focused on maintaining a
healthy policy life expectancy, which is a significant measure to
The Commercial Auto business is also recording year-over-year
growth over the past few months.
The company generated a total of 39 cents in earnings per share
in Jan and Feb, 2013.
We believe that the company is poised to benefit from impressive
operating performances and its market leading position.
Other Stocks to Consider
Progressive is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
Arch Capital Group Ltd
), Earnings ESP of +12.8% and a Zacks Rank #1 (Strong Buy).
AXIS Capital Holdings Limited
), Earnings ESP of +8.0% and a Zacks Rank #1 (Strong Buy).
Everest Re Group Ltd.
), Earnings ESP of +3.96% and a Zacks Rank #1 (Strong Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis
AXIS CAP HLDGS (AXS): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
To read this article on Zacks.com click here.