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Progressive Corp. (NYSE:PGR), a prominent insurance industry player with a market capitalization of $154 billion, reported May net earnings per share of $1.81, significantly exceeding Barclays (LON:BARC)’ estimate of $1.22, while the firm maintained its Equalweight rating and $297.00 price target on the insurance company’s stock. According to InvestingPro data, 14 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting continued momentum.
The earnings beat stemmed primarily from expense discipline, with a company-wide expense ratio of 18.8% versus the expected 20.9%, and strong underwriting results that produced a loss ratio of 68.2% compared to the anticipated 69.8%. These factors contributed to a combined ratio of 86.9%, substantially better than the 90.7% forecast by Barclays. This operational efficiency is reflected in Progressive’s impressive revenue growth of 20.7% over the last twelve months, as reported by InvestingPro, which maintains a "GREAT" overall financial health score for the company.
Progressive also benefited from $91 million in favorable prior-year development, though catastrophe losses were somewhat elevated at $275 million, modestly above the $233 million estimate. The company’s underlying combined ratio came in at 84.2%, 310 basis points below expectations, reflecting the insurer’s operational efficiency.
Policy-in-force growth was solid but slightly below expectations in most segments, with personal auto and company-wide growth at 19.7% and 15.9% respectively, compared to forecasts of 20.0% and 16.2%. This represents a slowdown from April, when personal auto and company-wide policy growth reached 20.9% and 16.9% respectively.
Net premiums written grew 11%, significantly below the projected 18.7%, though Progressive noted that 2-3 percentage points of the shortfall resulted from a monthly closing process timing difference, with the company expecting higher June premium growth as a result. Net premiums earned increased 14.6%, also below the estimated 17.6%. With Progressive’s next earnings report due on July 10, 2025, investors can access comprehensive analysis and additional insights through InvestingPro’s detailed Research Report, one of 1,400+ available for top US stocks.
In other recent news, The Progressive Corporation reported a remarkable 353% increase in net income for May 2025, reaching $1.07 billion, compared to $235 million in the same period last year. Net premiums written rose by 11% to $6.63 billion, and net premiums earned increased by 15% to $6.72 billion. The company’s earnings per share for common shareholders jumped to $1.81, a 352% rise from the previous year. Progressive’s combined ratio improved significantly to 86.9 from 100.4, indicating better profitability. Additionally, Progressive announced the renewal of its share repurchase program, authorizing the buyback of up to 25 million common shares, and declared a quarterly dividend of $0.10 per share.
Raymond (NSE:RYMD) James reiterated its Outperform rating for Progressive, maintaining a price target of $305, citing confidence in the company’s ability to sustain a favorable combined ratio. Keefe, Bruyette & Woods held a Market Perform rating with a $288 price target, revising their earnings per share estimates upwards for 2025 and 2026. Progressive also reported strong April results, with net premiums written increasing by 11% and net income more than doubling to $986 million. The company’s policy portfolio continued to grow, with personal lines policies increasing by 17% and commercial lines policies up by 6%.
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