PGR Stock On Track For Biggest One-Day Drop In 6 Months After Q2 Earnings – Analyst Sees Limited Upside For The Shares

• Combined ratio, a crucial indicator for insurance companies to track profitability, rose to 87.3% in Q2.
• Progressive had 98.9 million total personal lines policies in force in June and 1.2 million commercial lines policies.
• Wall Street sentiment is largely neutral on PGR, with 15 of 25 analysts covering the stock rating it a ‘Hold.’

Shares of Progressive Corporation (PGR) were down on Wednesday after the auto and home insurance company reported its second-quarter results.

At the time of writing, PGR stock was down more than 8% and on track for its biggest one-day percentage fall in over six months.

PGR Q2 Results

For the second quarter, the company’s net premiums written rose 5% to $21.08 billion, while net premiums earned climbed 6% to $21.57 billion. Net income for the three months ended June 30 came in at $3.31 billion, or $5.67 per share, compared to $3.18 billion, or $5.40 per share, for the same period last year.

Combined ratio, a crucial indicator for insurance companies to track profitability, rose to 87.3% for the quarter, up from 86.2% in the year-ago period. A lower combined ratio signals that the company is managing its risks well.

Oppenheimer analyst ​Michael Phillips said in a recent note seen by Reuters that the firm still expects limited upside for the ‌stock ⁠until growth returns, which is a function of industry pricing – something that it does not expect to invert soon given still-strong industry margins.

Wall Street sentiment is largely neutral on PGR, with 15 of 25 analysts covering the stock rating it a ‘Hold’; 7 rate it a ‘Buy’ or higher, and 3 ‘Sell’ or lower.

PGR’s June Performance Metrics

Progressive had 98.9 million total personal lines policies in force in June, up 8% from last year, while commercial lines policies were up 3% at 1.2 million.

In June, the company’s net premiums written saw a 3% rise to $6.77 billion, while net premiums earned ticked up 2% to $7.1 billion. The combined ratio was 90%, compared with 86.6% last year.

Net income for the month fell 31% to $779 million. Total pretax net realized losses on securities were $13 million, compared to gains of $179 million for the same month last year.

On Stocktwits, retail sentiment toward the stock remained in ‘bullish’ territory over the last 24 hours. PGR stock is down 7% so far this year and fell more than 13% over the last 12 months.

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