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Can Progressive (PGR) Q3 Earnings Beat on Premium Rise?

We expect property and casualty insurer Progressive CorpPGR to beat expectations when it reports third-quarter results on Oct 16 before the market opens.

Why a Likely Positive Surprise?

Our proven model shows that Progressive has the right combination of two key ingredients.

Zacks ESP : Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +2.13%. This is because the Most Accurate estimate of 48 cents is higher than the Zacks Consensus Estimate of a penny below. The positive ESP is a meaningful indicator of a likely positive earnings surprise for the company.

Zacks Rank : Progressive carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1, 2 or 3 have a significantly higher chance of beating earnings.

The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What is Driving the Better-Than-Expected Earnings?

Performance in the to-be reported quarter will be driven by improved premiums, which in turn will benefit from healthy policy life expectancy. Progressive's expanded multi-product offering should also help it to write better premiums. The quarter is also likely to witness healthy policies in force.

Progressive is expected to have benefitted from its efforts to cross sell auto policies with property insurance.

Progressives' initiatives aimed at providing consumers with distinctive new auto insurance options and its Snapshot program are also expected to drive growth.

Continued buyback should also boost the bottom line.

Progressive has delivered positive earnings surprises in three of the last four quarters, with an average earnings beat of 13.37% driven by higher premiums.

Other Stocks to Consider

Here are some other companies you may also want to consider as these too have the right combination of elements to post an earnings beat this quarter:

The Travelers Companies, Inc. TRV , Earnings ESP of +13.88% and a Zacks Rank #1 (Strong Buy). The company is slated to come up with the third-quarter earnings report on Oct 21.

The Chubb Corp. CB , Earnings ESP of +13.15% and a Zacks Rank #1. The company is expected to report its third-quarter earnings on Oct 21.

PartnerRe Ltd. PRE , Earnings ESP of +70.82% and a Zacks Rank #1. The company is scheduled to report third-quarter earnings on Oct 26.

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TRAVELERS COS (TRV): Free Stock Analysis Report

CHUBB CORP (CB): Free Stock Analysis Report

PARTNERRE LTD (PRE): Free Stock Analysis Report

PROGRESSIVE COR (PGR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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