Results: The Progressive Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

The Progressive Corporation (NYSE:PGR) just released its latest second-quarter results and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.5% to hit US$18b. Progressive also reported a statutory profit of US$2.48, which was an impressive 40% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Progressive

After the latest results, the eleven analysts covering Progressive are now predicting revenues of US$73.6b in 2024. If met, this would reflect a meaningful 8.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.7% to US$12.26. Before this earnings report, the analysts had been forecasting revenues of US$73.2b and earnings per share (EPS) of US$11.12 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.

The consensus price target was unchanged at US$235, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Progressive at US$293 per share, while the most bearish prices it at US$144. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Progressive's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Progressive to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Progressive following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$235, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Progressive. Long-term earnings power is much more important than next year's profits. We have forecasts for Progressive going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Progressive's balance sheet, and whether we think Progressive is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com