The firm sees good visibility into the pipeline profits and the company's substantial net unrealized common equity gains a positive position which stood at $1 billion at the end of first quarter 2015, Credit Suisse noted.
"Given the gradual move higher in interest rates and the Aeroflex Holding Corp. (ARX) acquisition which should add $2 to $3 million of net interest income per month, we think there is pretty good visibility toward a bottoming of net investment income," Credit Suisse analysts said.
Progressive is an insurance holding company that provides personal auto insurance, commercial auto and truck insurance principally for small businesses, and other specialty property-casualty insurance and related services.
Separately, TheStreet Ratings team rates PROGRESSIVE CORP-OHIO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROGRESSIVE CORP-OHIO (PGR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 4.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has increased to $771.10 million or 16.72% when compared to the same quarter last year. Despite an increase in cash flow, PROGRESSIVE CORP-OHIO's average is still marginally south of the industry average growth rate of 21.99%.
- Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market, PROGRESSIVE CORP-OHIO's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: PGR Ratings Report