Sell Rating on Progressive: Limited Policy-Mix Upside Amid Rising EPS Compression Risk by 2027

In a report released on April 17, Bob Huang from Morgan Stanley maintained a Sell rating on Progressive, with a price target of $190.00.

Bob Huang has given his Sell rating due to a combination of factors tied primarily to Progressive’s longer‑term earnings outlook. He argues that the current debate about the mix of six‑month versus twelve‑month auto policies is largely a distraction, because the share of twelve‑month contracts remains small and any uplift to net written premiums from shifting mix would be marginal in scale.

Instead, Huang believes investors should concentrate on the potential for earnings per share to compress by 2027, particularly as pricing momentum softens and weighs on premium growth. In his view, the modest benefit from policy-term changes cannot offset the risk that slower rate increases and a more challenging growth environment will pressure profitability, leaving the stock vulnerable relative to expectations.

PGR’s price has also changed moderately for the past six months – from $225.610 to $202.580, which is a -10.21% drop .