Decelerating Growth, Rising Competition, and Weaker Buybacks Undermine Progressive’s Upside, Justifying Sell Rating

Progressive, the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Bob Huang from Morgan Stanley maintained a Sell rating on the stock and has a $214.00 price target.

Bob Huang has given his Sell rating due to a combination of factors that, in his view, limit Progressive’s upside from here. He highlights that auto policy growth has become erratic and meaningfully weaker than his expectations, suggesting that rising competitive pressure is beginning to bite and that the outsized expansion seen in 2024 and early 2025 is unlikely to be repeated in the near term. While management continues to demonstrate strong underwriting discipline, with a combined ratio comfortably below 90%, Huang believes this profitability strength is already well appreciated by the market and not enough to offset concerns about slower policy growth and a tougher operating environment.
In addition, capital return is skewing more toward special dividends rather than share repurchases, with November buybacks falling far short of his prior assumptions. This shift reduces the expected earnings-per-share boost from buybacks in 2026–2027, creating another drag on his forward estimates and valuation view. Taken together, the decelerating growth trajectory, intensifying competition, and less supportive capital-return mix lead Huang to maintain a cautious stance and justify his Sell recommendation, even as he acknowledges Progressive’s long-term franchise quality and underwriting excellence.

According to TipRanks, Huang is an analyst with an average return of -3.8% and a 53.55% success rate. Huang covers the Financial sector, focusing on stocks such as Progressive, Principal Financial, and Arch Capital Group.