Earnings Preview: Progressive Reports Results Thursday

| About: Progressive Corporation (PGR)

The Progressive Corporation (PGR)

Who They Are:

Progressive Corp. is an auto insurance company and a writer of auto insurance through independent agents. Progressive trades an average of 3.5 million shares per day with a market cap of $12.6 Billion.

52 Week High: $23.3

52 Week Low: $17.09

Book Value: $10.23

Price To Book: 2.01

Progressive is anticipated to report weak second quarter earnings before the market opens on July 12, 2012. The consensus estimate is currently 27 cents a share, a decline of $0.11 (28.9 percent) from $0.38 during the same period last year.

Shareholders have not been rewarded for their patience, shares have fallen 4.8 percent in the last year, and the average analyst target price for Progressive is $22.14. The price target is not that far from the current trading price of $22.50, but for reasons I state below, it may be challenge.

The trailing twelve month price-to-earnings ratio is 14.6, the mean fiscal year estimate price-to-earnings ratio is 15.7, based on earnings of $1.31 per share this year. Investors are receiving 41 cents in dividends for a yield of 1.98 percent.

Industry and Peers Comparison:

PGR

ALL

ING

AIG

Strong Buy

5

14

1

9

Moderate Buy

1

0

1

0

Hold

10

9

1

8

Moderate Sell Ratings

0

0

0

0

Strong Sell Ratings

5

1

0

0

Ave Analyst Price Target

$22.14

$37.75

$12.35

$38.36

Operating Margin

5.60%

2.70%

9.40%

4.80%

Quick Ratio

0.5

0.2

1.3

0.3

Price/Sales

0.8

0.5

0.3

1

Price Change 52 Weeks

-4.80%

12.90%

-47.30%

5.80%

Click to enlarge

In the last month the stock has fallen -5.89% and the price is bouncing along the 200 day moving average. Generally, this means lower prices are on the way. A close below the moving average may signal an exit for many trend followers. The recent downgrade by Deutsche doesn't help.

For the same fiscal period year-over-year, revenue has improved to $14.96 billion last fiscal year compared to $14.54 billion in the previous year. The bottom line has rising earnings year-over-year of $1.07 billion last fiscal year compared to $1.06 billion in the previous year.

Earnings History

Mar, 2011

Jun, 2011

Sep, 2011

Dec, 2011

EPS Estimate

0.43

0.39

0.27

0.35

EPS Actual

0.45

0.38

0.24

0.37

Difference

0.02

-0.01

-0.03

0.02

Surprise %

4.65%

-2.56%

-11.11%

5.71%

Click to enlarge

Mar, 2012

0.39

0.42

0.03

7.69%

Click to enlarge
Click to enlarge

Robert Weinstein uses information believed to be correct, but is not guaranteed and is not independently checked for accuracy You may wish to use this article as a starting point of your own research with your financial planner. Seeking Alpha, Edgar Online, Zacks and Yahoo Finance provides most of the data. paid2trade.com uses the "confirmed" symbols from earnings.com that believed to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.