Analyst Joshua Shanker from Bank of America Securities reiterated a Buy rating on Progressive (PGR – Research Report) and increased the price target to $286.00 from $273.00.
Joshua Shanker has given his Buy rating due to a combination of factors including Progressive’s solid performance and promising growth prospects. Shanker acknowledges that Progressive’s operating earnings per share (EPS) for April aligned with expectations, albeit slightly lower than the high forecast. Despite a slight increase in the combined ratio due to higher catastrophe losses and expense ratios, these were partly counterbalanced by a lower than projected core loss ratio. The robust growth in policies in force (PIF), particularly in personal auto policies, exceeded Shanker’s forecasts, indicating a strong market position and potential for continued expansion.
Moreover, Shanker notes that Progressive’s growth in policy count continues to impress, with total PIF growth surpassing forecasts and increasing year-over-year. He also points out that the rise in auto insurance premiums suggests a favorable environment for low-cost providers like Progressive. Shanker maintains a high forecast for the last nine months of 2024, confident that consensus estimates may need to be adjusted upward. The revised price objective reflects a modest adjustment due to higher catastrophe losses and a slight decrease in investment float, yet it still represents significant upside potential from the current market price. Shanker’s optimistic outlook is supported by his EPS forecast, which remains much higher than the consensus, justifying the Buy rating on Progressive’s stock.
PGR’s price has also changed moderately for the past six months – from $157.670 to $209.250, which is a 32.71% increase.
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Progressive (PGR) Company Description:
The Progressive Corporation is one of the leading auto insurers in the United States. The company also offers residential property insurance, reinsurance, and other specialty property-casualty insurance and related services. Its Personal Lines business unit covers insurance for personal automobiles, recreational and other vehicles. Under the Commercial Lines division, Progressive writes primary liability and physical damage insurance for automobiles owned by small businesses. Its Property segment offers residential property insurance for homeowners, renters and other property owners.
