2 Signals That Progressive Will Top Wall Street’s Earnings Consensus

Progressive Corp. (PGR) is set to report earnings for its 3rd fiscal quarter of the year before the opening bell on Friday, October 10th. The Progressive insurance company has now strung together 2 continuous years of beating the Wall Street earnings consensus and investors on Estimize expect that pattern to continue tomorrow.

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Contributing analysts on Estimize are looking for Progressive to report earnings of 45 cents per share. Meanwhile Wall Street, which has set the bar too low 8 quarters in a row, is forecasting 43 cents per share. In addition to topping the Wall Street consensus analysts on Estimize are predicting that Progressive’s profits will increase by 15% compared to the same quarter of last year.

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On the revenue side Progressive has been all over the place throughout the past year. However, investors on Estimize are betting the company will report total sales of $4.672 billion, up 5% from last year. Wall Street is mildly optimistic too, but again setting a more conservative outlook, only predicting revenue of $4.654 billion.

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One pattern that investors look for is accelerating analyst estimate revisions. The directionality of analyst revisions going into an earnings release are often a leading indicator. When combined with a solid earnings beat history, positive revisions offer a pretty good signal that the company is going to cruise past the Wall Street consensus.

As seen above analysts from Wall Street and Estimize are raising their revenue estimates ahead of the report. That indicator combined with Progressive’s recent earnings beat history gives a pretty good chance that Progressive will maintain its 100% batting average against the Street’s consensus on Friday.

One final note; if Progressive does beat Wall Street and reports earnings of 45 cents per share, don’t expect traders to be buying Progressive stock hand over fist. 45 cents is exactly what they were expecting in the first place.

Disclosure: None.

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