Progressive Likely to Beat? - Analyst Blog
08 Avril 2013 - 2:11PM
Zacks
We expect Progressive Corp. (PGR) 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 ingredients.
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 earnings announcement.
The combination of Progressive’s Zacks Rank # 1 (Strong Buy) and
+4.65% ESP makes us very confident regarding an earnings beat on
Apr 10.
What is Driving the Better Than Expected
Earnings?
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
retain customers.
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
peers:
Arch Capital Group Ltd. (ACGL), Earnings ESP of
+12.8% and a Zacks Rank #1 (Strong Buy).
AXIS Capital Holdings Limited (AXS), Earnings ESP
of +8.0% and a Zacks Rank #1 (Strong Buy).
Everest Re Group Ltd. (RE), Earnings ESP of +3.96%
and a Zacks Rank #1 (Strong Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis Report
AXIS CAP HLDGS (AXS): Free Stock Analysis Report
PROGRESSIVE COR (PGR): Free Stock Analysis Report
EVEREST RE LTD (RE): Free Stock Analysis Report
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