Progressive’s Strong Financial Performance and Growth Potential Justify Buy Rating

William Blair analyst Adam Klauber has maintained their bullish stance on PGR stock, giving a Buy rating on May 19.

Adam Klauber has given his Buy rating due to a combination of factors that highlight Progressive’s strong financial performance and growth potential. The company’s April results indicate a promising trajectory towards achieving an estimated $16.50 EPS by 2025, surpassing the current market consensus of $15.69. This optimism is supported by a robust monthly EPS of $1.68 and a significant 21% growth in personal auto policies in force (PIF), which demonstrate strong earnings momentum at the start of the second quarter.
Despite a slight deceleration in net premiums written growth to 11%, Progressive has managed to improve its core auto loss ratio to 64%, down from 65% in the previous quarter. Additionally, the company’s combined ratio has improved to 85%, a notable decrease from the prior year’s result, while total PIF has grown by 17%. These metrics suggest that the company’s financial targets are not only achievable but may also be conservative, reinforcing the Buy rating.

In another report released on May 19, Morgan Stanley also maintained a Buy rating on the stock with a $330.00 price target.

Based on the recent corporate insider activity of 107 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PGR in relation to earlier this year.