Barclays lowers Progressive stock price target to $281 on valuation concerns

Published 18/08/2025, 19:06
Barclays lowers Progressive stock price target to $281 on valuation concerns

Investing.com - Barclays (LON:BARC) has reduced its price target on Progressive Corp. (NYSE:PGR) to $281.00 from $287.00 while maintaining an Equalweight rating on the insurance company’s stock. According to InvestingPro data, Progressive, with a market capitalization of $144.65 billion, currently shows strong financial health with an overall score of "GREAT."

The research firm noted that Progressive currently trades at approximately 15.3 times its estimated 2026 earnings per share, which falls below the company’s 10-year average price-to-earnings multiple of 17.7 times. Currently, the stock trades at 13.85x trailing earnings, with 11 analysts recently revising their earnings estimates upward for the upcoming period.

Barclays indicated that using price-to-revenue is a more informative metric for valuation in the current environment, as it helps smooth out distortions from both the post-COVID inflation-driven underearning period and the current over-earning phase.

On a price-to-revenue basis, Progressive is trading at approximately one standard deviation above its 20-year average, which Barclays considers reasonable given the company’s strong near-term earnings and growth profile.

The firm maintained its Equalweight rating due to concerns about a potential quicker reversion to long-term average margins, particularly if competitive pressures intensify in the fourth quarter. This caution comes despite Progressive’s strong return on equity of 37% and robust cash flows that adequately cover interest payments.

In other recent news, Progressive Corporation reported its second-quarter 2025 earnings, showcasing a strong performance with earnings per share (EPS) of $5.40, which exceeded analysts’ expectations of $4.36. This represents a positive earnings surprise of 23.85%. Despite this, the company’s revenue was slightly below forecasts, reaching $20.08 billion compared to the anticipated $20.48 billion. Additionally, Progressive announced a quarterly dividend of $0.10 per share, payable on October 10, 2025, to shareholders recorded by October 2, 2025. These developments reflect Progressive’s ongoing financial activities and investor engagement.

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