Progressive stock price target lowered to $250 by Evercore ISI on competition concerns

Investing.com - Evercore ISI has reduced its price target on Progressive Corp. (NYSE:PGR) to $250.00 from $273.00 while maintaining an "In Line" rating on the insurance company’s stock. The company, currently trading at $226.50 with a market capitalization of $132.82 billion, is trading near its 52-week low. According to InvestingPro analysis, Progressive appears undervalued based on its Fair Value metrics.

The firm cited Progressive’s miss on policies in force (PIF) combined with a higher expense ratio and lower net premiums written (NPW) growth as indicators of increased competition in the auto insurance market. Evercore noted that Progressive experienced a 4% decrease in premium per policy. Despite these challenges, InvestingPro data shows the company maintains strong revenue growth of 18.35% and trades at a P/E ratio of 13.19, suggesting resilient fundamentals. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.

According to Evercore’s analysis, more of the PIF and NPW misses occurred in Progressive’s Direct business segment, which aligns with higher shopping propensity in non-standard auto insurance and increased advertising spend by competitors. The firm observed that these factors coincided with the renewal period for Progressive’s March PIF additions.

Despite these challenges, Evercore predicts that Progressive could announce a $10 per share special dividend based on its excess capital position, even after accounting for credits related to Florida operations.

The firm lowered its earnings estimates for Progressive by 1-2% to reflect lower premium growth and a slightly worse underwriting loss ratio, noting that this development could be a negative indicator for other insurance industry players like Travelers Companies and Allstate as it suggests increasing competition.

In other recent news, Progressive Corporation reported a 30% increase in net income for August 2025, reaching $1.22 billion, compared to $935 million in the same month last year. The insurer also saw an 11% rise in net premiums written, amounting to $7.2 billion, and an 18% increase in net premiums earned, reaching $7.04 billion. Earnings per share available to common shareholders grew to $2.07, up from $1.59 in August 2024. BofA Securities raised its price target for Progressive to $347, citing an updated forecast for the company’s year-end special dividend of $10 per share. Meanwhile, BMO Capital downgraded Progressive from Outperform to Market Perform, adjusting its price target to $250 due to competitive concerns. Despite the downgrade, BMO Capital raised its earnings per share estimates for 2026 and 2027, reflecting a modestly improved outlook. Keefe, Bruyette & Woods also adjusted their price target upward to $270, following Progressive’s earnings report. These developments highlight a period of significant financial activity and analyst attention for Progressive.

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