On Jun 25, Zacks Investment Research upgraded
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Progressive's earnings estimates have been rising on the back of
the company's consistent strong performance.
The company's first-quarter 2013 earnings were ahead of both the
Zacks Consensus Estimate and the year-ago figure. Progressive has
been reporting year-over-year improvement over the last two
months as well.
The long-term expected earnings growth rate for this stock is
In April and May, the company generated a total of 42 cents in
earnings, with premiums increasing year over year for both
Progressive's operating earnings and premiums' growth as well as
debt-to-total capital ratio in the last two months of this year
reflect an overall constant improvement. Current policies in
force also remained healthy. Progressive remains focused on
maintaining a healthy policy life expectancy, which is a
significant measure to retain customers.
We expect Progressive to surpass expectations when it reports its
second-quarter results on Jul 11. Our proven model shows
that the property & casualty insurer is likely to beat
earnings because it has a right combination of a positive
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #2 (Buy). ESP or Expected Surprise Prediction,
which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is +5.1%.
Additionally, for the second quarter the Zacks Consensus Estimate
is pegged at 39 cents, up 96% year over year.
The Zacks Consensus Estimate for 2013 increased 4.7% to $1.56 per
share as most of the estimates were revised higher over the last
30 days. For 2014, more than half of the estimates were revised
higher over the same period, lifting the Zacks Consensus Estimate
by 3.1% to $1.65 per share.
Other Stocks to Consider
Apart from Progressive,
The Hanover Insurance Group Inc
HCI Group, Inc
Hilltop Holdings Inc
) are also worth considering. All these carry a Zacks Rank #1
HCI GROUP INC (HCI): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
HANOVER INSURAN (THG): Free Stock Analysis
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