Zacks Investment Ideas feature highlights: Progressive

For Immediate ReleaseChicago, IL – February 27, 2025 – Today, Zacks Investment Ideas feature highlights The Progressive Corp. PGR.This Market Leader Benefits from Higher Auto Insurance RatesHigher mortgage rates. Higher credit rates. Higher insurance rates.Unfortunately for consumers, this high interest-rate environment continues to linger longer than we’d like.The latest sign that elevated rates are here to stay came yesterday in the form of remarks from Richmond Fed President Tom Barkin. Barkin said that he would like to keep interest rates “moderately restrictive” until he gains more confidence that inflation is closer to the Fed’s 2% target.“I prefer to wait and see how this uncertainty plays out and how the economy responds,” Barkin stated.Earlier in February, Fed Chief Jerome Powell testified before Congress, telling lawmakers that the interest rate path remains “uncertain.” Powell also reiterated the Fed’s cautious, data-dependent stance as the central bank assesses how the inflation picture evolves in the coming months.The uncertainty is weighing on consumers. The Conference Board’s Consumer Confidence Index registered at 98.3 in February, a sharp drop from the 105 reading from January and below the 102.5 expectation from economists. It was the biggest monthly decline in four years; clearly, consumers are feeling uneasy about the future state of the economy.The next FOMC meeting is slated for three weeks from now, and markets are pricing in just a 2.5% chance of a rate cut. While Powell has signaled that the worst of inflation is likely behind us, the path for rate cuts has been steadily pushed back amid hotter-than-expected inflation data.Rate Cuts Delayed as Inflation LingersThe latest Consumer Price Index (CPI) report showed headline prices increased 3% over the prior year in January, an uptick from December’s 2.9% annual gain. On a monthly basis, headline inflation rose 0.4%.Excluding food and energy, the “core” CPI showed an annual increase of 3.3%. Core prices also rose 0.4% on a monthly basis. All figures were above forecasts and higher than in December.Traders pared back bets on interest rate cuts this year, pricing in just one cut following the data.Transportation is one of the components within the CPI that has remained sticky. Surging auto insurance rates are a big reason why that has been the case. From a longer-term perspective, US auto insurance rates are up 95% over the last decade, far above the 35% increase in overall consumer prices.Auto insurance rates in the US have spiked by 55% over the past 3 years, marking the biggest 3-year surge since the ‘70s. For the commuters out there, you’ve probably noticed more accidents over the years due to higher levels of traffic, which in turn raises costs to repair damaged vehicles.We’ll get an update on the inflation front later this week in the form of the core personal consumption expenditures (PCE) index data, which serve as the Fed’s preferred inflation gauge.Higher Car Insurance Rates Send This Stock SoaringThe biggest beneficiaries of rising insurance prices have undoubtedly been car insurance companies. The Zacks Insurance – Property and Casualty industry group contains many car insurance companies that have outperformed the market. This group currently ranks in the top 18% out of approximately 250 industries and has shown relative strength to start the year.Targeting individual stocks contained within the top industry groups provides a constant ‘tailwind’ to our investing success.One leading company within this group isThe Progressive Corp. Over the last decade, PGR stock has widely outperformed the S&P 500 with an incredible 1,226% gain. The trend has continued this year, as PGR rewards investors with an 18% return year-to-date.A Zacks Rank #2 (Buy), Progressive provides personal and commercial property and casualty insurance along with other specialty insurance services primarily in the United States. The company sells its products through independent insurance agencies as well as directly to the consumer.The insurance provider continues to gain on higher premiums given its compelling product portfolio, leadership position and strength in its vehicle and property businesses. Revenues have steadily increased over the years, with current estimates calling for growth of 16.5% to $87.5 billion this year.Analysts covering PGR are expecting solid earnings numbers and have bumped up full-year EPS estimates by 5.79% in the past 60 days. The 2025 Zacks Consensus Estimate stands at $14.79 per share, reflecting a 5.3% growth rate relative to last year.Keep an eye on this insurance giant as the company looks primed to continue its outperformance.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Progressive Corporation (PGR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks