Progressive, the Financial sector company, was revisited by a Wall Street analyst today. Analyst Michael Zaremski from BMO Capital maintained a Hold rating on the stock and has a $247.00 price target.
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Michael Zaremski has given his Hold rating due to a combination of factors impacting Progressive’s stock. While he acknowledges the company’s strong earnings performance, with a return on equity exceeding 30%, he remains cautious about the stock’s valuation. Despite the company’s historical affordability, Zaremski notes that the stock has been cheaper in the past, especially when considering normalized profit margins and valuation metrics like EV/Revenues.
Furthermore, Zaremski highlights the potential for increased earnings per share through share repurchases and organic policy growth. However, he is concerned about the market’s focus on Progressive’s decelerating revenue trajectory, which could overshadow the company’s strong earnings. Additionally, while Progressive has gained regulatory approval to operate with higher leverage, offering potential capital flexibility, Zaremski remains cautious about how this might be competed away over time.
In another report released yesterday, Evercore ISI also maintained a Hold rating on the stock with a $250.00 price target.