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Investing.com - BMO Capital has maintained its Market Perform rating and $247.00 price target on Progressive Corp. (NYSE:PGR). According to InvestingPro data, the stock appears undervalued at its current price of $202.24, trading near its 52-week low of $205.55 with a P/E ratio of 11.1.
The research firm had previously downgraded Progressive shares based on expectations of revenue deceleration and margin erosion. While revenue deceleration has materialized as predicted, margin erosion has not yet occurred. Despite concerns, Progressive maintains a "GREAT" overall financial health score according to InvestingPro analysis.
According to BMO Capital’s analysis of Progressive’s 10-Q commentary, revenue headwinds partially attributed to double-digit pricing declines in Florida may be subsiding. However, the firm notes it remains unclear whether mix-shifts toward lower-cost and shorter duration policies have fully abated.
BMO Capital suggests Progressive shares could experience a bounce if October’s revenue trends align more closely with market expectations. InvestingPro technical indicators support this possibility, with RSI suggesting the stock is in oversold territory after declining 27.1% over the past six months.
The insurance company has scheduled an investor call for Tuesday at 9:30 AM Eastern Time, which can be accessed through investors.progressive.com/events. Progressive remains profitable with diluted EPS of $18.22, and is one of 1,400+ US equities with comprehensive Pro Research Reports available through InvestingPro.
In other recent news, Progressive Corp. has seen several adjustments in its stock price targets from various financial firms. Goldman Sachs has lowered its price target to $245, maintaining a Buy rating, following a reduction in earnings per share estimates for 2025-2027 due to quarterly performance misses and reduced net premiums written growth. Morgan Stanley downgraded the stock from Equalweight to Underweight, setting a new price target of $214, citing concerns over a softer pricing cycle that could affect valuation multiples. Raymond James also revised its price target downward to $265 while keeping an Outperform rating, noting Progressive’s significant position as the second-largest personal auto insurer by premium in 2024. BMO Capital adjusted its price target to $247, maintaining a Market Perform rating, due to ongoing soft pricing-power conditions in the insurance sector. Wells Fargo lowered its price target to $246, retaining an Equal Weight rating, after September data indicated slowing growth in personal auto policies and a weaker loss ratio. These developments reflect a cautious outlook among analysts regarding Progressive’s future performance amid changing market conditions.
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