) is set to report fourth-quarter 2013 results on Jan 22. Last
quarter its earnings were in line with the Zacks Consensus
Estimate. Let's see how things are shaping up for this
Growth Factors This Past Quarter
Positive results in the months of October and November raise
optimism for modestly higher earnings in the fourth quarter for
Progressive. Increased policies in force within the personal
auto, special lines and personal lines insurance business is
expected to drive net premiums earned.
However, growth at Commercial Auto businesses could be
challenging. Policy life expectancy (PLE), a measure for customer
retention, is also showing soft results.
Nonetheless, a benign catastrophe environment should aid
Progressive Corp.'s combined ratio improvement.
Progressive remains focused in returning value to its
shareholders. It approved a special dividend of $1.00, testifying
the inherent strength of its balance sheet. At the onset of the
fourth quarter, it retired $150 million 7% Notes engaging into
deleveraging activities that would further improve its
Our proven model does not conclusively show that Progressive is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP and a Zacks Rank #1, 2
or 3 for this to happen. That is not the case here as you will
Negative Zacks ESP
: That is because the Most Accurate estimate stands at 41
cents while the Zacks Consensus Estimate is higher at 42 cents.
That leads to a difference of -2.38%.
Zacks Rank #3 (Hold)
. Progressive's Zacks Rank #3 when combined with a negative
earnings ESP makes surprise prediction difficult. We caution
against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going
into the earnings announcement, especially when the company is
seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
Aspen Insurance Holdings Ltd.
earnings ESP of +8.49% and a Zacks Rank #1 (Strong Buy).
), earnings ESP of +11.24% and a Zacks Rank #1 (Strong Buy).
The Travelers Companies, Inc
), earnings ESP of +0.479% and Zacks Rank #2 (Buy).
ASPEN INS HLDGS (AHL): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
PARTNERRE LTD (PRE): Free Stock Analysis
TRAVELERS COS (TRV): Free Stock Analysis
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