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Investing.com - Goldman Sachs has lowered its price target on Progressive Corp. (NYSE:PGR) to $245.00 from its previous target, while maintaining a Buy rating on the insurance company’s stock. The target sits within the current analyst range of $189-$351, with InvestingPro data showing 14 analysts recently revising their earnings estimates upward for the upcoming period.
The price target reduction comes after Progressive’s September results prompted Goldman Sachs to decrease its earnings per share estimates for 2025-2027 by 6%, 4%, and 4%, respectively. The firm attributes the 2025 decrease largely to quarterly performance misses, while the lower estimates for 2026/2027 stem from reduced net premiums written (NPW) growth. Despite these adjustments, Progressive maintains strong fundamentals with an 18.35% revenue growth and a modest P/E ratio of 11.93x.
Goldman Sachs expects the decline in average annualized Personal Auto premium per policy to continue throughout 2025-2027, though at a slightly slower rate than in the second half of 2025. The firm projects average quarterly annualized premium-per-policy to decline by approximately 3% over the next two years.
Despite projecting below-consensus NPW growth, Goldman Sachs remains optimistic about policies-in-force (PIF) growth, forecasting 30.5 million PIFs by 2027, which is 2% above the Street consensus of 30 million. The firm believes this growth will be supported by Progressive’s advertising spend, estimated at slightly over $1.3 billion in the third quarter of 2025.
Goldman Sachs has increased its projected capital deployment for Progressive by approximately 100%, with capital deployment split somewhat evenly between share buybacks and dividends. The firm’s $245 price target represents a potential 16% total return and reflects a 3.8x price-to-book value multiple, or 15x multiple on short-term management operating earnings per share. Notably, Progressive has maintained dividend payments for 16 consecutive years, demonstrating consistent shareholder returns. For comprehensive analysis and additional insights, access the full Progressive research report on InvestingPro, where you’ll find detailed financial health metrics and growth projections.
In other recent news, Progressive Corp. has been the subject of multiple analyst adjustments. Morgan Stanley downgraded Progressive from Equalweight to Underweight, expressing concerns about the company’s position in a softer pricing cycle, which could impact earnings. Meanwhile, Raymond James lowered its price target for Progressive to $265, maintaining an Outperform rating, highlighting the company’s substantial net premiums written in 2024. BMO Capital also reduced its price target to $247, citing persistent soft pricing-power conditions in the insurance industry. Wells Fargo adjusted its target to $246, noting slowing growth in personal auto policies and a weaker underlying loss ratio. Evercore ISI followed suit, lowering its target to $250, pointing to increased competition and a decrease in premium per policy. These developments reflect a broader sentiment of caution among analysts about Progressive’s near-term financial performance.
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